Advisory Panel on 

Streamlining and Codifying 

Acquisition Regulations

Section 809 Panel Interim Report

May 2017
Members of the Advisory Panel on Streamlining and 

Codifying Acquisition Regulations

The Honorable Deidre A. Lee, Chair

Mr. David G. Ahern

Maj Gen Casey D. Blake, USAF

Mr. Elliott B. Branch

The Honorable Allan V. Burman

Mr. David A. Drabkin

VADM Joseph W. Dyer, USN (Ret.)

Ms. Cathleen D. Garman

Ms. Claire M. Grady

BG Michael D. Hoskin, USA

The Honorable William A. LaPlante

Maj Gen Kenneth D. Merchant, USAF (Ret.)

Mr. David P. Metzger

Dr. Terry L. Raney

Maj Gen Darryl A. Scott, USAF (Ret.)

LTG N. Ross Thompson III, USA (Ret.)

Mr. Laurence M. Trowel

Mr. Charlie E. Williams, Jr.
Advisory Panel on 

Streamlining and Codifying 

Acquisition Regulations 

Section 809 Panel Interim Report 

May 2017 

The Section 809 Panel is pleased to submit the enclosed interim report.     

The Department of Defense spends nearly $300 billion annually acquiring systems, goods,

and services in support of the nation’s defense. A successful acquisition system is critical to

providing warfighting and defense capability.    

Section 809 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114–

92), as amended by Section 863(d) of the National Defense Authorization Act for Fiscal Year

2017 (Public Law 114–328), established an independent Advisory Panel on Streamlining and

Codifying Acquisition Regulations—the Section 809 Panel. By statute, the panel was formed

to

 Review the acquisition regulations applicable to the Department of Defense with a view

toward streamlining and improving the efficiency and effectiveness of the Defense

acquisition process and maintain defense technology advantage and  

 Make recommendations for the amendment or repeal of such regulations that the panel

considers necessary to

 establish and administer appropriate buyer and seller relationship in the

procurement system,

 improve the functioning of the acquisition system,

 ensure the continuing financial and ethical integrity of defense procurement

programs,

 protect the best interests of the Department of Defense, and

 eliminate any regulations that are unnecessary for the above purposes.

To date, the 18 panel commissioners have organized into working groups focused on key

challenges facing decision‐makers in Congress and DoD with respect to the defense

acquisition system. Commissioners and panel professional staff are looking at all aspects of

that system to enhance DoD’s agility to acquire what it needs to meet threats posed by a

more fluid geopolitical environment, promote cost savings without shortchanging

readiness, and simplify an antiquated system wedded to practices that challenge the

workforce and push away marketplace innovators.

Commissioners and panel staff have already met with more than 200 government and

industry representatives to discuss new approaches to defense acquisition. Outreach

includes not just meeting with acquisition leaders, practitioners, and marketplace

representatives, but also communication with the larger interested public through an active

web presence and direct in‐person interaction.
Although the Section 809 Panel is just beginning its work, the focus of our efforts is to put

mission first and recognize the importance of timeliness in the face of a rapidly evolving threat.  

The Section 809 commissioners and professional staff look forward to hearing from you as we

move toward developing comprehensive reform proposals with actionable recommendations for

statutory and regulatory changes.

Sincerely,  

Deidre Lee

Chair, Section 809 Panel
   

 v 

Table of Contents 

List of Figures ................................................................................................... vi

List of Tables ..................................................................................................... vi

Acronym List ..................................................................................................... vi

EXECUTIVE SUMMARY ..................................................................................... 1 

The Demand for Fundamental Change ...................................................................... 2

The Interim Report .............................................................................................. 4

ADAPT AT THE SPEED OF A CHANGING WORLD ...................................................... 5

The Nature of the Strategic Threat .......................................................................... 6

Technology and Innovation .................................................................................... 7

LEVERAGE THE DYNAMIC DEFENSE MARKETPLACE ................................................. 9

Changes to the Defense Industrial Base ................................................................... 10

An Evolving Marketplace ..................................................................................... 11

The Growing Global Marketplace ........................................................................... 12

New Relationships ............................................................................................. 14

ALLOCATE RESOURCES EFFECTIVELY ................................................................. 15 

Erosion of U.S. Defense Spending-Advantage ............................................................ 16

Effective Expenditures ....................................................................................... 19

SIMPLIFY ACQUISITION ................................................................................... 21 

Unnecessarily Complex System ............................................................................. 22

Mission Must Come First ...................................................................................... 24

ENABLE THE WORKFORCE .............................................................................. 27 

Incentivize Effective Decision-Making ..................................................................... 28

Authority and Accountability ................................................................................ 30

Support the Workforce ....................................................................................... 31

THE PATH FORWARD ..................................................................................... 33 

APPENDICES ................................................................................................ 37 

Appendix A: Enabling Legislation ........................................................................... 38

Appendix B: Panel Activities ................................................................................ 40

Appendix C: Panel Teams .................................................................................... 46

Appendix D: Communication with the Panel ............................................................. 48

Appendix E: Professional Staff .............................................................................. 49

 
Section 809 Panel Interim Report 

vi 

LIST OF FIGURES 

Figure 1. U.S. R&D Spending – 1961 to 2013 (FY2009 USD) ................................................... 17

Figure 2. Gross Domestic Expenditures on R&D – 1995 to 2015 .............................................. 18

Figure 3. Acquisition Strategy Schedule - Actual ............................................................... 31

LIST OF TABLES 

Table 1. FAR Part 52.301 FAR Matrix – Solicitation Provisions and Contract Clauses by Principal 

Type and Purpose of Contract ................................................................................ 23

ACRONYM LIST 

ABCT Armored Brigade Combat Team

DFARS Defense Federal Acquisition Regulation Supplement

DoD Department of Defense

ECSS Expeditionary Combat Support System

ERK Electronic Record Keeping

FAR Federal Acquisition Regulation  

FY Fiscal Year

FYDP Five Year Defense Plan

GAO Government Accountability Office

JLTV Joint Light Tactical Vehicle

MRAP Mine‐Resistant Ambush Protected

NDAA National Defense Authorization Act

OECD Organisation for Economic Cooperation and Development

OMB Office of Management and Budget

R&D Research and Development

RDT&E Research, Development, Test, and Evaluation

RFP Request for Proposals

SAP Simplified Acquisition Procedures

USD U.S. Dollars

UTC United Technologies Corporation
 1 

 

EXECUTIVE SUMMARY 
Section 809 Panel Interim Report 

2 

THE DEMAND FOR FUNDAMENTAL 

CHANGE 

The Section 809 Panel was established by

Congress in the National Defense

Authorization Act (NDAA) for Fiscal Year (FY)

2016 to address a fundamental problem: The

way the Department of Defense (DoD) buys

what it needs to equip its warfighters is from

another era, one in which the global strategic

landscape was entirely different. Today the

United States’ ability to maintain technological,

military, and economic superiority is being

challenged because its adversaries are rapidly

modernizing their militaries with an eye

toward exploiting U.S. vulnerabilities and

negating traditional U.S. advantages.1 DoD has

not fully adjusted to the pace of this

environment, nor has it adjusted to a

marketplace that bears no resemblance to that

of just a few decades ago.  

In short, both the strategic and marketplace

realities, as described in this report, require a

degree of agility that DoD is not currently able

to deliver. The nation’s strategic needs must

drive the business model, not the other way

around.

In the last 50 years, there have been more than

100 reports, studies, and analyses of how DoD

acquires goods and services. From these

reports, the lesson learned is clear: Tinkering

and incremental approaches to acquisition

reform have not provided the necessary results

and are especially ineffective in today’s rapidly

changing environment. In fact, incremental

approaches have exacerbated problems with

the acquisition system by adding more layers of

sign off, mountains of paperwork, and

hundreds of additional regulations. DoD must

                                                     

1 John McCain, Restoring American Power: Recommendations for the FY 2018– FY 2022 Defense Budget, accessed January 27, 2017,

https://www.mccain.senate.gov/public/_cache/files/25bff0ec‐481e‐466a‐843f‐68ba5619e6d8/restoring‐american‐power‐7.pdf.  

implement bold approaches and bold solutions

to produce true reform.   

The Section 809 Panel’s Objectives

From its beginning, the Section 809 Panel’s

overarching objective has been to make

recommendations that, if adopted, will enable

DoD to more consistently buy what it needs in

a timely and cost‐effective manner—whether

that be commercial items, information

technology, services, weapon systems, or the

full range of tools and equipment on which

warfighters depend.  

For the purposes of this report, the acquisition

system—which is conditioned by statute,

regulations, executive orders, directives,

policies, and procedures—is the overall process

by which DoD buys goods and services. The

process includes requirements, budgeting,

production, testing, deployment, and

sustainment.  

The acquisition system, when viewed as a

whole, creates obstacles to getting the needed

equipment and services because it makes DoD

an unattractive customer to large and small

firms with innovative, state‐of‐the‐art solutions.

The system creates additional impediments

because suffocating bureaucratic requirements

make the pace at which it proceeds simply

unacceptable in today’s rapidly changing

technological environment. DoD must replace

this system, designed for buying equipment for

the Cold War, with one that takes advantage of

technologies and methodologies available in

the current marketplace. Essential equipment

needed on the ground may be either

unavailable to the department or egregiously
Executive Summary

 3 

tardy, leading to genuine threats to the nation’s

security. DoD does not have the luxury to wait.

These ideas are not new. The 1986 Packard

Report made a similar point.

Excellence in defense management cannot be

achieved by the numerous management layers,

large staffs, and countless regulations in place

today. It depends ... on reducing all of these by

adhering closely to basic, common sense

principles: giving a few capable people the

authority and responsibility to do their job,

maintaining short lines of communication, and

holding people accountable for results.2  

As compared to 1986, there are far more layers

at DoD, to include even larger staffs, and too

many regulations to count. The inescapable

conclusion when viewing DoD acquisition as a

whole, due to no one’s intentions or actions in

particular, is that process wins out over results.

In addition, too frequently ancillary public

policy objectives, often driven by statutes or

executive orders, receive equal or greater

priority than mission.  

Data-Driven, Actionable 

Recommendations 

The Section 809 Panel final report will provide

specific, data‐driven recommendations that, if

implemented, will do the following:

 Enable DoD to be more adaptable in the face

of a rapidly changing threat environment.

 Make DoD a more attractive customer in the

new, dynamic defense marketplace.  

 Enable DoD to use scarce resources allocated

to procurement more efficiently.

                                                     

2 President’s Blue Ribbon Commission on Defense Management, A Quest for Excellence, Final Report to the President, accessed April 17,

2017,

http://usacac.army.mil/cac2/CSI/docs/Gorman/06_Retired/01_Retired_1985_90/07_86_PackardCommission_FinalReport/01_PackardCo

mmission_FinalReport.pdf.

 Simplify the acquisition process so goods

and services can be purchased in a timely

manner without unnecessary burden.

 Encourage and incentivize the workforce to

make sound, mission‐driven decisions.

The Section 809 Panel’s recommendations will

focus both on streamlining the process and

putting forth new approaches that adopt

techniques from the way private‐sector

business is conducted in the 21st century. These

recommendations will form a method of

buying that is simple, understandable, and easy

to execute and that results in timely, cost‐

effective acquisition.

Section 809 Panel commissioners and staff

already have spoken to high‐level

representatives from dozens of companies,

including those that sell to DoD, those that do

not but would like to, and even those that will

not consider competing for contracts. The

message is clear: A process that features

excessive layers, tremendous amounts of

paperwork, and timeframes that do not fit the

way most firms do business is off‐putting to

firms in the marketplace. DoD must develop

the ability to be a savvy customer in the real‐

world marketplace, so it is able to purchase the

technology and equipment it needs.  

Its enabling legislation requires the Section 809

Panel to report findings by August 2018. By

that time, the panel will make recommenda‐

tions that comprehensively strip away the

regulatory underbrush that hampers the

department’s ability to maintain a competitive

advantage in the face of the country’s enemies.

In addition, the panel will put forth
Section 809 Panel Interim Report 

4 

recommendations, supported by specific

statutory and regulatory implementing

language, to change the way the department

approaches the marketplace in its efforts to

purchase the whole range of goods and services

needed to equip its warfighters. As it stands,

the process has left the acquisition workforce

stymied in its good faith efforts to deliver the

right goods in a timely manner. Although

change is never easy, and at times it can be

painful, the status quo is unacceptable.

THE INTERIM REPORT 

This interim report sets forth the Section 809

Panel’s framework for the need for acquisition

reform. This framework, addressed in the five

main sections of the report, will guide the

panel’s future work and recommendations.   

Adapt at the Speed of a Changing World 

The United States is operating in a global

environment that is more fluid, more

interconnected, and faster evolving than at any

point in history. To adapt to this reality, the

acquisition process must be agile enough to

respond to rapidly evolving threats, and fast

enough to develop and deliver new capabilities

within the arc of emerging threats.  

Leverage the Dynamic Defense 

Marketplace 

The defense industrial base has changed, and to

maintain technological advantage, DoD

increasingly must leverage the commercial

marketplace. To be successful in this broader

marketplace requires a fundamental change in

the DoD–commercial relationship. DoD must

become an attractive customer with which

commercial firms want to do business. This

need requires DoD to be a more sophisticated

buyer that is responsive to market dynamics,

company interests, and the greater economic

landscape.   

Allocate Resources Effectively 

The U.S. military faces multiple threats posed

by increasingly capable adversaries and

uncertain domains of warfare. It also contends

with constrained defense budgets. To more

effectively and efficiently allocate resources,

DoD must better align and coordinate how it

budgets, sets requirements, and acquires what

it needs, to include not only major weapon

systems, but also the services and low‐dollar

items that make up more than half of DoD

contract spending.  

Simplify Acquisition 

Some of the regulations and statutes governing

defense acquisition are outdated or no longer

applicable and should be amended or repealed

to make the system more effective and efficient,

and expand the number of companies willing to

do business with DoD.

Enable the Workforce 

The current acquisition laws and regulations

are overly complex, difficult to understand and

implement, and contain requirements that

result in people making suboptimal decisions

and being risk‐averse. DoD needs an

acquisition system that is simple,

understandable, and executable by people

operating in an environment that empowers

and incentivizes them to make decisions that

lead to positive outcomes.   
 5 

ADAPT AT THE SPEED OF A 

CHANGING WORLD    
Section 809 Panel Interim Report 

6 

The United States is operating in a global

environment that is more fluid, more

interconnected, and faster evolving than at any

point in history. To adapt to this new reality,

the acquisition process must be agile enough to

respond to rapidly evolving threats and fast

enough to develop and deliver new capabilities

within the arc of emerging threats.  

DoD needs an acquisition system that can shift

and adapt as quickly as the strategic landscape.

As former Chairman of the Joint Chiefs General

Martin Dempsey wrote in the 2015 National

Military Strategy, “Today’s global security

environment is the most unpredictable I have

seen in 40 years of service.”3 DoD’s acquisition

system must be capable of nimbly moving

among, or simultaneously pursuing,

fundamentally different capabilities on

different timelines. For example, the system

must accommodate, at the same time,

delivering mine‐resistant ambush protected

(MRAP) vehicles to support ongoing

operations, developing and acquiring cyber

warfare capabilities, and fostering the cutting‐

edge capabilities of the future. The faster

technology changes, the more flexible

acquisition must be.  

THE NATURE OF THE STRATEGIC 

THREAT 

With respect to U.S. security, the geopolitical

landscape has been generally stable. For the

first few decades of the 20th century, the lens

                                                     

3 Joint Chiefs of Staff, The National Military Strategy of the United States of America: The United States Military’s Contribution to National

Security, accessed April 17, 2017, http://www.jcs.mil/Portals/36/Documents/Publications/2015_National_Military_Strategy.pdf. 4 General James Mattis, Senate Armed Services Committee Nomination Hearing Statement, accessed April 24, 2017,  

https://www.armed‐services.senate.gov/imo/media/doc/Mattis_01‐12‐17.pdf. 5 Dmitri Trening, “The Revival of the Russian Military: How Moscow Reloaded,” Foreign Affairs, May/June 2016,

https://www.foreignaffairs.com/articles/russia‐fsu/2016‐04‐18/revival‐russian‐military. Department of Defense, Annual Report to

Congress: Military and Security Developments Involving the People’s Republic of China 2016, accessed April 17, 2017,

https://www.defense.gov/Portals/1/Documents/pubs/2016%20China%20Military%20Power%20Report.pdf. 6 The State of the World: Hearing before the U.S. House of Representatives Committee on Armed Services, 115th Cong. (2017), (statement

of David H. Petraeus), accessed April 17, 2017, http://docs.house.gov/Committee/Calendar/ByEvent.aspx?EventID=105509.

through which the strategic threat was viewed

focused on Europe. For nearly 50 years after

World War II, the strategic threat emanated

from a Cold War perspective, which was

followed by a period after the 1991 Soviet

collapse when U.S. military and economic

dominance remained relatively unchallenged.  

Currently, the emergence of peer competitors,

midtier regional adversaries, and nonstate

actors capable of threatening U.S. interests and

lives has created an unstable geopolitical

landscape.4 These adversaries are learning how

to offset traditional U.S. military advantages.

Russia and China have embarked on rapid

modernization efforts and are aggressively

challenging U.S. interests around the world and

testing U.S. resolve, alliances, and military

capabilities.5 At the same time, nonpeer

adversaries are becoming more capable and

lethal as advanced military hardware becomes

more accessible and innovative technologies

with military applications become more

abundant, cheap, and available.  

The United States must now contend with

potential adversaries that are not just rising

global powers but also are important trading

partners. These adversaries threaten areas of

vital strategic importance for the United States,

as well as its allies and partners that have

shared interest and values.6 The threats are

more numerous, geographically diverse (or, in

the case of nonstate actors or cyber warfare,
Adapt at the Speed of a Changing World  

 7 

potentially without a geographic location), and

unpredictable.7 New threats emerge faster, and

different threats require fundamentally

different, and often multivariate, responses.8 All

of these factors have combined to create a

world where the geopolitical strategic

environment is more fluid, complex, and

unpredictable than ever.9

TECHNOLOGY AND INNOVATION 

The technology of warfare had remained static

for extended periods, punctuated by short

bursts of innovation‐driven development of

new warfare technologies and capabilities, such

as gunpowder, ironclad ships, combustion

engines, airpower, and drones. The current

acquisition system is predicated on a more

stable and predictable context instead of

today’s dynamic environment with constantly

changing and emerging technology.

For example, the 31⁄2‐inch floppy disk,

introduced in 1987, held a mere 1.44 MB.10 Just

30 years later, it was replaced by the 1 TB flash

drive, which can house more information than

                                                     

7 H.R. McMaster, “Harbingers of Future War: Implications for the Army with Lieutenant General H.R. McMaster” (presentation at Center

for Strategic and International Studies, May 4, 2016), accessed April 17, 2017, https://www.csis.org/events/harbingers‐future‐war‐

implications‐army‐lieutenant‐general‐hr‐mcmaster.   8 Department of Defense, Quadrennial Defense Review 2014, accessed April 17, 2017,

http://archive.defense.gov/pubs/2014_Quadrennial_Defense_Review.pdf. 9 Council on Foreign Affairs, Preventive Priorities Survey: 2017, accessed February 3, 2017, http://www.cfr.org/conflict‐

assessment/preventive‐priorities‐survey‐2017/p38562. Department of Defense, Quadrennial Defense Review 2014, accessed April 17,

2017, http://archive.defense.gov/pubs/2014_Quadrennial_Defense_Review.pdf. 10 “Floppy Disk: Background,” McGill College, accessed April 18, 2017,

http://cs.mcgill.ca/~rwest/wikispeedia/wpcd/wp/f/Floppy_disk.htm. 11 “How Many Floppy Disks Can You Fit in a Terabyte?” Landmark Technologies, accessed April 18, 2017,

https://www.lmktec.co.uk/blog/how‐many‐floppy‐disks‐can‐you‐fit‐terabyte.   12 “Your Smartphone is Millions of Times More Powerful Than All of NASA’s Combined Computing in 1969,” ZME Science, accessed

March 16, 2017, http://www.zmescience.com/research/technology/smartphone‐power‐compared‐to‐apollo‐432/.   13 John David Blom, Unmanned Aerial Systems: A Historical Perspective (Fort Leavenworth, KS: Combat Studies Institute Press, 2010), 93,

107.

14 Committee on Homeland and National Security of the National Science and Technology Council, A 21st Century Science, Technology,

and Innovation Strategy for America’s National Security, accessed April 17, 2017,

http://www.defenseinnovationmarketplace.mil/resources/National_Security_ST_Strategy_2016_FINAL.PDF. 15 Ben FitzGerald, Alexandra Sander, and Jacqueline Parziale, Center for a New American Security, Future Foundry:  A New Strategic

Approach to Military‐Technical Advantage, accessed April 17, 2017, https://s3.amazonaws.com/files.cnas.org/documents/CNAS‐Report‐

FutureFoundry‐final.pdf.   

728,177,000 floppy disks.11 Like storage

capacity, computing power is increasing

quickly as well. The processing power of an

iPhone 6 is 120,000,000 times faster than the

computers used to put a man on the moon.12

Technology innovation also enabled the U.S.

military to go from its first use of the Predator

unmanned autonomous vehicle for surveillance

in battle in 1995 to the weaponized Predator by

2001.13

Technological innovation in the late 20th and

early 21st centuries was a catalyst for the

current speed of weapons development.14 DoD

is now in a period during which the time a

particular technology is a dominant force on the

battlefield is getting increasingly shorter,

disruptive technologies are emerging at a faster

pace, and these technologies are more widely

dispersed. DoD has benefited from disruptive

technologies and been able to incorporate these

innovations, from netcentric warfare to

unmanned vehicles .

15 To fully incorporate

existing and future technologies requires

organizational shifts that will allow DoD to
Section 809 Panel Interim Report 

8 

access and incorporate them faster than

potential competitors.16

In a world with rapidly changing technology,

time is a valuable resource that must not be

taken for granted. It is difficult to predict what

capabilities DoD will need 5 to 10 years from

now—biotechnology, nanotechnology, artificial

intelligence, robotics, or a new technology area

not even known today. It also is unclear on

what plane the military will conduct warfare—

traditional battlefields, space, cyberspace, or

some other domain.17 The current acquisition

system lacks the agility needed to adapt to new

paradigms.

Achieving technological dominance is not

simply a matter of developing and acquiring

the most advanced technology. Deputy

Secretary of Defense Robert Work has

emphasized that it also requires “operational

and organizational constructs” that allow DoD

to interact with new technologies and

effectively integrate them into a strategic

framework.18 As Chairman of the Joint Chiefs of

Staff Gen. Joseph Dunford stated, “Keeping

pace with the speed of war means changing the

                                                     

16 Barry Watts, Center for Strategic and Budgetary Assessments, The Maturing Revolution in Military Affairs, accessed April 17, 2017,

http://csbaonline.org/uploads/documents/2011.06.02‐Maturing‐Revolution‐In‐Military‐Affairs1.pdf.   17 Department of Defense, Quadrennial Defense Review 2014, accessed April 17, 2017,

http://archive.defense.gov/pubs/2014_Quadrennial_Defense_Review.pdf.   18 Sydney J. Freedberg, Jr., “Air Force Leading Way to 3rd Offset: Bob Work,” Breaking Defense, September 21, 2016,

http://breakingdefense.com/2016/09/air‐force‐ops‐centers‐lead‐way‐to‐3rd‐offset‐bob‐work/.   19 Jim Garamone, “Dunford: Speed of Military Decision‐Making Must Exceed Speed of War,” DoD News, January 31, 2017,

https://www.defense.gov/News/Article/Article/1066045/dunford‐speed‐of‐military‐decision‐making‐must‐exceed‐speed‐of‐war/.   20 Committee on Homeland and National Security of the National Science and Technology Council, A 21st Century Science, Technology,

and Innovation Strategy for America’s National Security, accessed April 17, 2017,

http://www.defenseinnovationmarketplace.mil/resources/National_Security_ST_Strategy_2016_FINAL.PDF. 21 Ben FitzGerald, Alexandra Sander, and Jacqueline Parziale, Center for a New American Security, Future Foundry:  A New Strategic

Approach to Military‐Technical Advantage, accessed April 17, 2017, https://s3.amazonaws.com/files.cnas.org/documents/CNAS‐Report‐

FutureFoundry‐final.pdf.  

way we approach challenges, build strategy,

make decisions and develop leaders.”19 Systems

and capabilities must be developed, deployed,

and integrated into operations within the arc of

the threat, not after the threat has passed or

after DoD has spent billions of dollars on

technologies or capabilities that already are

obsolete or will be obsolete by the time they are

deployed. The private sector now drives much

of the technological innovation, which makes it

difficult for DoD to keep pace.20

Although making the acquisition system

operate faster would help to a degree, it is not

enough. The acquisition process, including

requirements definitions and budgeting, must

be flexible enough to deliver the needed

capabilities. Instead of being so rigid and

convoluted, the acquisition system should be

shaped to fit the required capabilities. Such a

process may require multiple acquisition

pathways that can be tailored to specific

requirements and timeframes, depending on

whether the need is to prototype new systems;

buy commercial off‐the‐shelf items; or modify

off‐the‐shelf technologies into deployable,

limited‐production programs.21  
 9 

LEVERAGE THE DYNAMIC 

DEFENSE MARKETPLACE    
Section 809 Panel Interim Report  

10 

The nature of the defense industrial base has

changed, necessitating a fundamental change in

the relationship between DoD and the

commercial marketplace. For the purposes of

the Section 809 Panel’s work, this report will

refer to the broader marketplace as the dynamic

defense marketplace. To successfully leverage the

dynamic defense marketplace, the department

must become a savvy, attractive customer with

which firms want to do business. This need

requires DoD to be a more sophisticated

buyer—one that understands and is responsive

to market dynamics, company interests, and the

greater economic landscape.  

CHANGES TO THE DEFENSE 

INDUSTRIAL BASE 

The defense acquisition system is primarily

predicated on a post‐World War II conception

of the global economy, commercial

marketplace, and management practices that no

longer holds true.22 The era of the traditional

defense industrial base is over. The number of

firms exclusively manufacturing defense

products in the United States is declining, and

the firms that are defense‐oriented are relying

more on subcontractors.23 DoD increasingly

turns to and relies on a marketplace of boutique

defense companies and nondefense firms

                                                     

22 Defense Business Board, Innovation: Attracting and Retaining the Best of the Private Sector, accessed April 18, 2017,

http://dbb.defense.gov/Portals/35/Documents/Reports/2014/DBB‐FY14‐02‐Innovation%20report%20%28final%29.pdf. 23 Andrew Hunter, Center for Strategic and International Studies, Defense Acquisition Trends 2015: Acquisition in an Era of Budget

Uncertainty, accessed April 18, 2017, https://defense360.csis.org/acquisition‐and‐beyond/. 24 Ben FitzGerald, Alexandra Sander, and Jacqueline Parziale, Center for a New American Security, Future Foundry:  A New Strategic

Approach to Military‐Technical Advantage, accessed April 17, 2017, https://s3.amazonaws.com/files.cnas.org/documents/CNAS‐Report‐

FutureFoundry‐final.pdf. 25 Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics, Annual Industrial Capabilities: Report to Congress

for 2015, accessed April 18, 2017, http://www.acq.osd.mil/mibp/resources/2015%20AIC%20RTC%2010‐03‐16%20‐

%20Public%20Unclassified.pdf. 26 “Defense Outlook 2017: A Global Survey of Defense‐Industry Executives,” John Dowdy and Elizabeth Oakes, McKinsey and Company ‐ 

accessed April 18, 2017, http://www.mckinsey.com/industries/aerospace‐and‐defense/our‐insights/defense‐outlook‐2017‐a‐global‐

survey‐of‐defense‐industry‐executives.   27 Thomas Davis, “The Incredible Shrinking Defense Industrial Base,” SIGNAL Magazine, June 16, 2015,

http://www.afcea.org/content/?q=Blog‐incredible‐shrinking‐defense‐industrial‐base. 28 “Fortune 500 List,” Fortune.com, accessed April 24, 2017, http://beta.fortune.com/fortune500/list.

defined not by the industrial age but by the

technologies, services, or unique capabilities

they provide.24  

The traditional defense industrial base—

manufacturing companies that primarily

operate in the defense sector—has diminished

substantially. According to DoD, the last major

defense downturn in the late 1980s and early

1990s resulted in more than 300 prime

contractors, platform providers, and subtier

companies merging to form the five mega‐primes

of today: Boeing, Lockheed Martin, Northrop

Grumman, Raytheon, and General Dynamics.25

Defense industry senior executives believe

defense mergers and acquisitions will accelerate

through the end of the decade, with more

consolidation still to come.26 One factor driving

this trend is that the defense sector is less

robust than in the past. In the 1960s, the

Fortune 100 included 15 defense firms that

represented 30 percent of the revenue for the

group.27 In 2017, the Fortune 100 includes only

four defense firms, representing barely

3 percent of the revenue for the group.28
Leverage the Dynamic Defense Marketplace 

 11 

One of these companies, Boeing, receives less

than half of its revenue from DoD.29 Many

companies that previously focused primarily on

the defense market are now diversifying their

client base, turning to nondefense clients for

revenue.30  

AN EVOLVING MARKETPLACE 

The dynamic defense marketplace is vastly

different from the defense‐centric marketplace

of the past in which DoD could set the rules of

acquisition. To effectively benefit from and

compete in the dynamic defense marketplace,

DoD must understand where it fits into the

current business environment and adapt to this

new reality. DoD needs to be a more

sophisticated buyer, one that understands

market dynamics, interests of companies

(including cash flow, profit motive, and

opportunity costs), and the broader economy.  

One of the challenges presented by DoD’s

increasing reliance on the commercial market is

                                                     

29 “Boeing: Products & Business Segments,” AeroWeb, accessed April 24, 2017, http://www.fi‐aeroweb.com/Boeing.html. 30 Thomas Davis, “The Incredible Shrinking Defense Industrial Base,” SIGNAL Magazine, June 16, 2015,

http://www.afcea.org/content/?q=Blog‐incredible‐shrinking‐defense‐industrial‐base.   31 Falan Yinug, Semiconductor Industry Association (SIA), email to Section 809 Panel, March 6, 2017.

32 Ibid.   33 In 1960, U.S. federal R&D spending, as reported by OMB in unadjusted dollars, was $5.9 billion for defense and $1.4 billion for

nondefense; see OMB, Table 9.7, Summary of Outlays for the Conduct of Research and Development: 1949–2017, accessed April 24, 2017,

https://obamawhitehouse.archives.gov/sites/default/files/omb/budget/fy2017/assets/hist09z7.xls. In 1960, estimated U.S. nonfederal

R&D spending, as reported by the National Science Board in unadjusted dollars, was $4.8 billion; see “Appendix Table 4‐6: U.S. R&D

Expenditures, by Source of Funds and Performing Sector: 1953‐2013,” National Science Foundation,  National Science Board, Science &

Engineering Indicators 2016, accessed April 24, 2017, https://www.nsf.gov/statistics/2016/nsb20161/uploads/1/7/at04‐06.pdf. Non‐U.S.

G‐7 spending in 1960 is extrapolated from Graham R. Mitchell, The Global Context for U.S. Technology Policy, U.S. Department of

Commerce, accessed April 18, 2017, https://usa.usembassy.de/etexts/tech/nas.pdf. The non‐U.S. G‐7 countries at the time included

Canada, the United Kingdom, France, Italy, Japan, and West Germany (now Germany). According to the report, the United States

accounted for 70.6 percent of R&D expenditures from these countries—which, extrapolating based on the OMB and NSB figures cited

above, produces an unadjusted dollar total of about $5.0 billion. 34 In 2013, U.S. federal R&D spending, as reported in unadjusted dollars, was $71.1 billion for defense and $61.4 billion for nondefense.

See OMB, Table 9.7, Summary of Outlays for the Conduct of Research and Development: 1949–2017, accessed April 24, 2017,

https://obamawhitehouse.archives.gov/sites/default/files/omb/budget/fy2017/assets/hist09z7.xls. The estimated U.S. nonfederal R&D

spending in 2013 is extrapolated from data published by the Organisation for Economic Cooperation and Development, which reported

$433.2 billion in U.S. R&D spending in 2013—indicating $300.8 billion in nonfederal R&D spending. See “Main Science and Technology

Indicators, Gross Domestic Spending on R&D ‐ Total, Million U.S. Dollars, 1981 – 2021,”OECD, accessed April 24, 2017,

http://stats.oecd.org. The 2013 data on R&D spending by non‐U.S. G‐7 countries is also provided in the OECD database: $24.6 billion for

Canada, $54.0 billion for France, $94.8 billion for Germany, $26.1 billion for Italy, $153.5 billion for Japan, and $39.0 billion for the UK.

its limited influence in that market. DoD no

longer dominates many sectors that it once did.

For example, although DoD previously

accounted for more than 90 percent of all

U.S. semiconductor purchases, by 1990,

purchases throughout the entire U.S. govern‐

ment represented less than 2 percent of the

global market.31 Today, that market share has

dropped to less than 0.5 percent of all

semiconductors made in the world.32 DoD‐

financed R&D is playing a less important role

in innovation and development, which further

diminishes DoD’s influence. In 1960, federal

defense‐related R&D accounted for an

estimated 49 percent of all R&D expenditures in

the United States, and 35 percent of G‐7

expenditures.33 By 2013, federal defense‐related

spending was just 16 percent of U.S. R&D

expenditures and 9 percent of those within the

G‐7.34

Given DoD’s diminishing influence in the

current marketplace, many companies have

little incentive to accommodate the long lead
Section 809 Panel Interim Report  

12 

times, restrictive contract terms, and onerous

regulations associated with government

contracting. The market for small arms

illustrates this point well. In the United States

alone, small arms companies produce more

handguns in one month than the Army will buy

in the next 25 years.35  

In 2005, the U.S. military set out to choose a

new handgun to replace the decades‐old M9

Beretta pistol.36 After 10 years of developing

and rewriting requirements, the Army issued a

request for proposal (RFP) to industry in the

fall of 2015. Even after 10 years, the Army did

not identify key requirements, such as caliber

or the specific ammunition for the new

handgun.37 The Army’s first draft RFP exceeded

350 pages, not counting 23 attachments.38The

paperwork alone added an estimated $15

million or 20 percent to procurement cost.39

Some in industry balked at the process and

complexity for a simple handgun purchase. For

                                                     

35 United States Department of Justice, Bureau of Alcohol, Tobacco, Firearms, and Explosives, Firearms Commerce in the United States:

Annual Statistical Update 2014, accessed April 24, 2017, https://www.atf.gov/file/3336/download. 36 Commerce Business Daily, Joint Combat Pistol Solicitation, accessed April 24, 2017, http://www.cbd‐

net.com/index.php/search/show/893436. Loren Data’s FBO Daily, Joint Combat Pitol (JPC) System, accessed April 24, 2017,

http://www.fbodaily.com/archive/2005/12‐December/04‐Dec‐2005/FBO‐00943889.htm. Federal Business Opportunities, Joint Combat

Pistol (JPC) System, accessed April 24, 2017,

https://www.fbo.gov/index?s=opportunity&mode=form&id=9f67b094636a104ae0bd1068f6ca672a&tab=core&_cview=1.   37 Rowan Scarborough, “Army Misfires on Pistol Upgrade Effort, Confuses Gun Makers with Complex Requirements,” Washington Times,

October 28, 2015, http://www.washingtontimes.com/news/2015/oct/28/army‐misfires‐on‐pistol‐upgrade‐effort‐confuses‐gu/.   38 Ibid. Former Secretary of Defense Robert Gates, when asked about the difficulty in buying a new handgun, commented how senior

leaders of the military should be asked, ‘‘why has it taken you guys 10 years? This is absurd.... Why is it a 350‐page RFP? It’s a handgun,

for God’s sake.” The Future of Defense Reform: Hearings before the U.S. Senate Committee on Armed Services, Session 1, 114th Cong.,

(2015), accessed https://www.gpo.gov/fdsys/pkg/CHRG‐114shrg20923/pdf/CHRG‐114shrg20923.pdf. 39 Rowan Scarborough, “Army Misfires on Pistol Upgrade Effort, Confuses Gun Makers with Complex Requirements,” Washington Times,

October 28, 2015, http://www.washingtontimes.com/news/2015/oct/28/army‐misfires‐on‐pistol‐upgrade‐effort‐confuses‐gu/. 40 Jahner, Kyle, “McCain slams Army’s wasteful plan for a new service pistol,” Army Times, October 29, 2015,

https://www.armytimes.com/story/military/careers/army/2015/10/29/mccain‐army‐trade‐blows‐over‐handgun‐replacement‐

program/74834518/.   41 Ben FitzGerald, Alexandra Sander, and Jacqueline Parziale, Center for a New American Security, Future Foundry:  A New Strategic

Approach to Military‐Technical Advantage, accessed April 17, 2017, https://s3.amazonaws.com/files.cnas.org/documents/CNAS‐Report‐

FutureFoundry‐final.pdf. 42 Alex Lockie, “Boeing Smells Blood in the Water and is Coming for Lockheed Martin’s F‐35 Business,” Business Insider, March 31, 2017,

http://www.businessinsider.com/boeing‐vs‐lockheed‐martin‐f‐18‐advanced‐super‐hornet‐f‐35c‐navy‐2017‐3. Andrew Clevenger and Lara

Seligman, “Boeing Protests Northrop’s Long‐Range Strike Bomber Contract,” Defense News, November 6, 2015,

http://www.defensenews.com/story/defense/2015/11/08/boeing‐protests‐northrops‐long‐range‐strike‐bomber‐contract/75225206/.

Ryan Mass, “Bell‐Boeing Contracted for V‐22 Sustainment and Upgrade Planning,” UPI, February 15, 2017, http://www.upi.com/Defense‐

News/2017/02/15/Bell‐Boeing‐contracted‐for‐V‐22‐sustainment‐and‐upgrade‐planning/6321487191850/ and Jen Judson, “Joint Multi‐

example, Ruger, a leading handgun

manufacturer, chose not to compete due to the

administrative costs to comply with the

requirements.40  

THE GROWING GLOBAL 

MARKETPLACE 

DoD increasingly relies on companies operating

in a fluid global economic ecosystem, marked

by mergers, acquisitions, spinoffs, joint

ventures, outsourcing, and combinations.

Boutique firms, with both corporate and

government clients, may bid on defense

contracts one year and not the next.41 Boeing

and Lockheed Martin competed fiercely on the

F‐35 Joint Strike Fighter program, yet partnered

on the Long Range Strike‐Bomber program,

and Bell Helicopter partnered with Boeing on

the V‐22 Osprey helicopter, yet competed

against Boeing for the Army’s Future Vertical

Lift program of helicopter modernization.42
Leverage the Dynamic Defense Marketplace 

 13 

A number of these companies, and their

employees, are not dependent on DoD for

future revenue or growth. They flow in and out

of the defense‐contracting world at multiple

tiers and in different combinations. This fluid

ecosystem of companies is the hallmark of the

new globalized economy in which the defense

industrial base is not, in fact, a stable base of

defense‐oriented industrial companies. It is

instead a constantly shifting group of

companies that align and realign for temporary

periods to deliver integrated capabilities.43   

During the wars in Iraq and Afghanistan, DoD

relied extensively on contractors to provide

such critical wartime support as force

protection, fuel delivery and storage,

transportation of troops and equipment,

translation services, and construction and

maintenance of facilities. Contractors

performing these vital services, most of whom

were foreign, sometimes outnumbered the U.S.

military personnel in Iraq and Afghanistan.44  

The globalized nature of the current defense

industry also extends to manufacturing and

supporting weapons systems. The F‐35 Joint

Strike Fighter, the U.S. military’s latest fifth‐

generation fighter, is being built in Texas,

                                                     

Role Demonstrators in Race to Starting Line,” Defense News, April 28, 2016, http://www.defensenews.com/story/defense/show‐

daily/aaaa/2016/04/28/joint‐multi‐role‐demonstrators‐race‐starting‐line/83611932/.    43 Ben FitzGerald, Alexandra Sander, and Jacqueline Parziale, Center for a New American Security, Future Foundry:  A New Strategic

Approach to Military‐Technical Advantage, accessed April 17, 2017, https://s3.amazonaws.com/files.cnas.org/documents/CNAS‐Report‐

FutureFoundry‐final.pdf. 44 Commission on Wartime Contracting in Iraq and Afghanistan, Transforming Wartime Contracting: Controlling Costs, Reducing Risks,

accessed April 18, 2017,

https://cybercemetery.unt.edu/archive/cwc/20110929213820/http://www.wartimecontracting.gov/docs/CWC_FinalReport‐lowres.pdf. 45 “Building the F‐35: Combining Teamwork and Technology,” Lockheed Martin, accessed April 18, 2017,

https://www.f35.com/about/life‐cycle/production. 46 Ibid. 47 Lockheed Martin Government Relations, email to Section 809 Panel, March 11, 2017. 48 Jacques Gansler, “Acquisition Challenges to Provide More For Less,” AFCEA Defense Acquisition Modernization Symposium (August 5,

2014), accessed April 18, 2017, http://www.afcea.org/events/modernization/14/documents/GanslerAcquisitionChanges.pdf. 49 “Top 100 for 2016,” Defense News, accessed April 18, 2017, http://people.defensenews.com/top‐100/. 50 Lewis Krauskopf, “With Sikorsky Sale Done, United Technologies Eyes Acquisitions,” Reuters, July 20, 2015,

http://www.reuters.com/article/sikorsky‐ma‐unitedtechnologies‐idUSL1N10019H20150720.  

Japan, and Italy.45 The F‐35 supply chain

consists of more than 300,000 parts

manufactured by 1,400 suppliers around the

world. 46 Among the nations that produce F‐35

parts, eight foreign nations have at least

10 major suppliers for F‐35 production.47 The

F‐35 is not an isolated example. Today, nearly

every major U.S. military weapon system

contains foreign parts.48  

The global and integrated nature of the

dynamic defense marketplace, in which DoD

now does business, necessitates that DoD no

longer rely solely on purely U.S.‐based

companies, or unilaterally dictate to, or control

decisions by, its suppliers. Consider the

example of Sikorsky Aircraft Corporation,

which manufactures the military’s UH‐60

helicopter (and many of its derivatives and

modified aircraft), as well as helicopters to

transport the president of the United States.

Sikorsky had been a long‐time subsidiary to

United Technologies Corporation (UTC) until

2015 when UTC, at the time one of the top

10 defense companies in the world,49 sold

Sikorsky, a helicopter manufacturer.50 The

$9 billion purchase of Sikorsky by Lockheed

Martin required regulatory approval from

multiple national and international jurisdictions
Section 809 Panel Interim Report  

14 

including Japan, South Korea, and even

China.51  

NEW RELATIONSHIPS 

To maintain technological dominance, DoD

must expand beyond the traditional defense

industrial base and its own internal R&D

efforts. The consolidating defense industrial

base, DoD’s limited influence in the commercial

marketplace and in R&D, and the changes to

the global economy require DoD to actively tap

the commercial marketplace. Leveraging this

marketplace, however, is not easy when, in

many instances, DoD needs the commercial

market more than the commercial market needs

DoD. According to Paul Francis, a former

managing director at Government

Accountability Office (GAO),52  

Commercial investment in R&D now dwarfs

DoDʹs by several factors. DoD still needs to

sponsor defense‐unique R&D. But the real gain

will be the extent to which it can take advantage

of the vast R&D going on in the private sector.

The answer is not to spend our way out of it.

DOD has to find a way to adapt to new

relationships with the commercial sector.

                                                     

51 Andrea Shalal, “Lockheed Says U.S. Approves Its $9 Billion Takeover of Sikorsky,” Reuters, September 24, 2015,

http://www.reuters.com/article/us‐sikorsky‐m‐a‐lockheed‐idUSKCN0RO1FN20150924.   52 Paul Francis, former managing director, Government Accountability Office, email to Section 809 Panel, April 6, 2017. 53 Ben FitzGerald, Alexandra Sander, and Jacqueline Parziale, Center for a New American Security, Future Foundry:  A New Strategic

Approach to Military‐Technical Advantage, accessed April 17, 2017, https://s3.amazonaws.com/files.cnas.org/documents/CNAS‐Report‐

FutureFoundry‐final.pdf. Andrew Hunter, Center for Strategic and International Studies, Defense Acquisition Trends 2015: Acquisition in

an Era of Budget Uncertainty, accessed April 18, 2017, https://defense360.csis.org/acquisition‐and‐beyond/.

DoD and Congress have not fully adjusted to

this reality. Too often DoD acts as if it can

dictate terms to industry, driving many

companies to opt out of the defense market.53

Company representatives have told the Section

809 Panel that their organizations have decided

not to do business with DoD because of overly

complex federal laws and DoD‐specific

regulations. DoD should adapt its acquisition

processes—which are conditioned by statute,

regulations, executive orders, directives,

policies, and procedures—to industry

approaches, rather than expecting companies to

accommodate DoD.
 15 

ALLOCATE RESOURCES 

EFFECTIVELY    
Section 809 Panel Interim Report 

16 

The U.S. military faces multiple threats posed

by increasingly capable adversaries and

uncertain domains of warfare. It also contends

with constrained defense budgets.54 DoD

cannot afford to be tied to processes that waste

limited resources that could be invested in

capabilities, readiness, force structure, or other

requirements.55 To more effectively and

efficiently allocate resources, DoD must better

align and coordinate how it budgets, sets

requirements, and acquires what it needs, to

include not only major weapons systems, but

also the services and low‐dollar items that

make up more than half of DoD contract

spending.56  

                                                     

54 John McCain, Restoring American Power: Recommendations for FY 2018‐2022 Defense Budget, accessed January 27, 2017,

https://www.mccain.senate.gov/public/_cache/files/25bff0ec‐481e‐466a‐843f‐68ba5619e6d8/restoring‐american‐power‐7.pdf. 55 Office of the Under Secretary of Defense (Comptroller)/Chief Financial Officer, United States Department of Defense Fiscal Year 2015

Budget Request Overview, March 2014, accessed April 19, 2017,

http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2015/fy2015_Budget_Request_Overview_Book.pdf. John McCain,

America’s Most Wasted: Indefensible $13 Billion Spent on Incapable Ships, Bad‐Behaving Pentagon Employees, African Rats & More,

accessed April 19, 2017, https://www.mccain.senate.gov/public/_cache/files/9f435670‐9a18‐4362‐9ff0‐294540a13cb7/americas‐most‐

wasted‐indefensible‐12‐19‐16.pdf.   56 Based on Section 809 Panel analysis of FY 2016 Federal Procurement Data System data, using product and service code definitions: As

of April 21, 2017, service and R&D contract obligations for FY 2016 were reportedly $149.6 billion, or 50.2 percent of all contract

obligations. “Federal Procurement Data System – Next Generation,” General Services Administration, accessed April 21, 2017,

https://www.fpds.gov. General Services Administration, Federal Procurement Data System Product and Service Codes Manual, August

2015 Edition, accessed April 21, 2017, https://www.fpds.gov/downloads/top_requests/PSC_Manual_FY2016_Oct1_2015.pdf.

Also see Congressional Research Service, “Defense Acquisitions: How and Where DOD Spends and Reports Its Contracting Dollars,”

accessed April 21, 2017, https://fas.org/sgp/crs/natsec/R44010.pdf, and Center for Strategic and International Studies, Defense

Acquisition Trends, 2016: The End of the Contracting Drawdown, accessed April 21, 2017, https://csis‐prod.s3.amazonaws.com/s3fs‐

public/publication/170309_Ellman_AcquisitionTrends2016_Web.pdf?EOHx.4yzTSKOdaa9FMLs3KStHUSrIO5Q. 57 National defense outlays for FY2015, as calculated by OMB, were $590 billion ($607 billion in FY2017 USD). Outlays for FY2000 were

$294 billion ($434 billion in FY2017 USD). See national defense outlays at “Office of Management and Budget Historical Tables,

Table 3.2—Outlays by Function and Subfunction: 1962–2021,” National Archives and Records Administration, accessed March 3, 2017,

https://obamawhitehouse.archives.gov/omb/budget/Historicals. See inflation adjustments at Department of Defense, National Defense

Budget Estimates for FY2017, Table 5‐1: Department of Defense and Selected Economy‐Wide Indices (“Total Department of Defense”

deflators used for calculations), accessed March 3, 2017, http://comptroller.defense.gov/Budget‐Materials. 58 “SIPRI Military Expenditure Database,” Stockholm International Peace Research Institute, accessed March 3, 2017,

https://www.sipri.org/databases/milex. Officially, the Chinese military spending figure for 2015 (including both central government and

local governments) was about $140 billion. The Department of Defense’s 2016 report on China‐related military developments provides

an estimated figure of $180 billion, and an estimate from the Stockholm International Peace Research Institute (SIPRI) puts the figure at

$214 billion. The 400 percent increase between 2000 to 2015 is based on SIPRI’s reported figures (all in constant 2014 USD) of $43 billion

in 2000 and $214 billion in 2015—an increase of 396 percent. 59 “SIPRI Military Expenditure Database,” Stockholm International Peace Research Institute, accessed March 3, 2017,

https://www.sipri.org/databases/milex.

EROSION OF U.S. DEFENSE 

SPENDING-ADVANTAGE 

The United States has the largest military

budget in the world, but other countries are

closing the gap. From 2000 to 2015, adjusted for

inflation, DoD spending increased about

40 percent.57 During that period, the military

budget of China reportedly quintupled.58  

In the same period, Russia and Saudi Arabia

(which have military budgets on par with one

another) both about tripled their military

spending.59 According to SIPRI’s data (all in

2014 USD), Russian military spending increased

from $29 billion in 2000 to $91 billion in 2015—

more than a 200 percent increase. Saudi
Allocate Resources Effectively 

 17 

spending increased from $30 billion to

$85 billion—about a 180 percent increase.60

Trends within the U.S. defense budget are

squeezing funding available for acquisition,

R&D, and force structure.61 In its FY 2017

budget submission, DoD emphasized efforts to

protect the investments in research, develop‐

ment, test, and evaluation (RDT&E) to ensure

the U.S. maintains its technological edge.62 The

Center for Strategic and Budgetary

Assessments (CSBA) projects, however, that

                                                     

60 Ibid. 61 Department of Defense, Defense Budget Priorities and Choices, Fiscal Year 2014, Accessed April 24, 2017,

http://archive.defense.gov/pubs/DefenseBudgetPrioritiesChoicesFiscalYear2014.pdf. 62 Department of Defense, Defense Budget Overview February 2016, accessed April 24, 2017,

http://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2017/FY2017_Budget_Request_Overview_Book.pdf. 63 Katherine Blakely, Analysis of the FY2017 Defense Budget and Trends in Defense Spending, Center for Strategic and Budgetary

Assessments, accessed April 24, 2017,  http://csbaonline.org/uploads/documents/CSBA6196‐2017‐Budget‐Analysis_PRINT.pdf, 34.

over the course of the Five Year Defense Plan

(FYDP), there will be a 7.1 percent decrease of

RDT&E spending from FY 2017 to FY 2021.63

Although DoD R&D spending growth is

slowing, R&D investments by private industry

and foreign nations are increasing substantially.

Between 1960 and 2013 defense spending on

R&D doubled (adjusted for inflation), yet

nondefense U.S. government R&D spending

Source: Federal spending from Office of Management and Budget, Table 9.7—Summary of Outlays for the Conduct of Research

and Development: 1949–2017, https://obamawhitehouse.archives.gov/omb/budget/Historicals. Nonfederal spending based on

“All Performers” R&D spending minus “Federal Total” R&D spending, from National Science Board, Science & Engineering

Indicators 2016, Appendix Table 4‐6, https://www.nsf.gov/statistics/2016/nsb20161/uploads/1/7/at04‐06.pdf.

Figure 1. U.S. R&D Spending – 1961 to 2013 (FY2009 USD)
Section 809 Panel Interim Report 

18 

increased more than sevenfold.64 This combined

federal spending has been dwarfed by an

elevenfold increase in all other U.S. spending

on R&D (which includes the private sector,

universities, and nonprofit organizations).65  

U.S. R&D investment growth rates have fallen

behind those of peer competitors. China has

increased its R&D expenditures at a rapid pace

to become the second‐largest funder of R&D

                                                     

64 “Office of Management and Budget Historical Table 9.7, “Summary of Outlays for the Conduct of Research and Development: 1949–

2017,” National Archives and Records Administration, accessed April 24, 2017,

https://obamawhitehouse.archives.gov/omb/budget/Historicals.   65 Nonfederal spending data from National Science Foundation, National Science Board, Science & Engineering Indicators 2016, Appendix

Table 4‐6: Science & Engineering Indicators 2016, accessed April 24, 2017,

https://www.nsf.gov/statistics/2016/nsb20161/uploads/1/7/at04‐06.pdf. 66 “Gross Domestic Spending on R&D,” Organisation for Economic Cooperation and Development, accessed April 17, 2017,

https://data.oecd.org/rd/gross‐domestic‐spending‐on‐r‐d.htm. 67 Ibid. 68 Ibid. For similar conclusions, see “Science & Engineering Statistics 2016,” National Science Foundation, accessed April 17, 2017,

https://www.nsf.gov/statistics/2016/nsb20161/#/data.

among nations.66 Between 1995 and 2015,

U.S. annual R&D investment increased in

unadjusted‐dollar terms by an estimated

87 percent.67 During the same period, R&D

investment (both privately and publicly

funded) increased in Russia by about

160 percent and in China by more than

2,000 percent.68 The United States remains the

world’s single largest funder of R&D, spending

23 percent more than the next highest funder

Source: Chart generated using information from “Gross domestic spending on R&D,” Organisation for Economic Cooperation

and Development, https://data.oecd.org/rd/gross‐domestic‐spending‐on‐r‐d.htm, accessed March 13, 2017.

Figure 2. Gross Domestic Expenditures on R&D – 1995 to 2015
Allocate Resources Effectively 

 19 

(China) in 2015; however, the Organisation for

Economic Cooperation and Development

(OECD) has predicted China’s R&D spending

will exceed that of the United States around

2019.69  

DoD cannot rely on outspending competitors

and industry in R&D. Other countries are

closing the technology gap by acquiring and

adapting products available in world markets,

conducting industrial espionage and

intellectual property theft, and pursuing

focused R&D. If DoD is to maintain a

technological and readiness edge, it must more

efficiently and effectively deploy its resources.

Every dollar counts.  

EFFECTIVE EXPENDITURES 

DoD could garner more from its funds if it

functioned in a flexible system that allowed

more effective resource allocation. An

opportunity cost arises each time DoD makes a

spending choice that could have been invested

in developing other capabilities, delivering

more units, or funding other critical

requirements. In some cases, DoD spent billions

                                                     

69 “China headed to overtake EU, US in science & technology spending, OECD says,”Organisation for Economic Co‐operation and

Development, accessed February 24, 2017, http://www.oecd.org/newsroom/china‐headed‐to‐overtake‐eu‐us‐in‐science‐technology‐

spending.htm. Organisation for Economic Co‐operation and Development, OECD Science, Technology, and Industry Outlook 2014,

accessed April 24, 2017, http://www.keepeek.com/Digital‐Asset‐Management/oecd/science‐and‐technology/oecd‐science‐technology‐

and‐industry‐outlook‐2014_sti_outlook‐2014‐en#page4.    70 Patrick Clowney, Jason Dever, and Steven Stuban, “Department of Defense Acquisition Program Terminations: Analysis of 11 Program

Management Factors,” Defense Acquisition Research Journal, 23, no. 3 (2016): 298‐328. 71 The Air Force’s Expeditionary Combat Support System (ECSS), a program to develop an integrated enterprise resource planning solution

to manage global logistics, was cancelled after spending $1.1 billion over 8 years (from 2004 to 2012), without ever being deployed. Chris

Kanaracus, “Air Force scraps massive ERP project after racking up $1B in costs,” Computerworld, Nov 14, 2012, accessed April 24, 2017,

http://www.computerworld.com/article/2493041/it‐careers/air‐force‐scraps‐massive‐erp‐project‐after‐racking‐up‐‐1b‐in‐costs.html.

According to an Army report, between 1996 and 2010, the Army directed more than $1 billion each year to programs that were

eventually canceled. For a 6‐year period (2004‐2010) 35‐42 percent of the Army’s annual development test and evaluation funding was

spent on canceled programs; 2010 Army Acquisition Review, Army Strong: Equipped, Trained, and Ready: Final Report of the 2010 Army

Acquisition Review, accessed April 24, 2017, http://breakingdefense.sites.breakingmedia.com/wp‐

content/uploads/sites/3/2011/07/213465.pdf.

72 U.S. Army Program Executive Office – Ground Combat Systems, email to Section 809 Panel, March 29, 2017.   73 Ibid. Under current program guidelines, the annual baseline costs for the ABCT program are $3.5 million for AMPVs, $13 million for

M1s and about $3 million for Bradleys. Under a two‐brigade purchasing system, annual baseline costs would decline for each vehicle to

on major programs it never fielded.70 One

example is the Air Force’s Expeditionary

Combat Support System (ECSS) information

technology (IT) system, for which a billion

dollars were spent, with no useful results,

before the program was cancelled.71 The issue is

not cancelling a program. Poor programs may

need to be cancelled, but in such cases, the

decision should happen earlier and before

spending so much money.  

Requirements, budgeting, and acquisition

strategies that are not aligned and coordinated

can cost billions of dollars. The Army is

planning to acquire 180 Armored Multi‐

Purpose Vehicles, 45 M1 Abrams and 92 M2

Bradleys annually for the Armored Brigade

Combat Team (ABCT) program over the next

few decades.72 Under current contractual

production rates, the combined annual baseline

per‐unit cost within the ABCT program is

$19.5 million. If the Army acquired vehicles at

the rate of two brigades annually, however, the

production efficiencies would save

approximately $11 billion during the life of the

program.73  
Section 809 Panel Interim Report 

20 

When alignment and coordination occur, DoD

may see cost savings. For example, the Joint

Light Tactical Vehicle (JLTV) is a joint Army

and Marine Corps program that provides

vehicles capable of performing multiple

mission roles. According to the Army, the

program’s innovative acquisition approach

resulted in a total cost savings of $11.3 billion

and cost avoidance of $17 billion.74 The JLTV

acquisition strategy was built around  

 consistent engagement with industry, other

potential DoD customers (e.g., Air Force,

Navy, Special Operations Command), and

potential foreign military sales customers;

 a source selection approach that

incorporated a tiered evaluation of proposals

that allowed for negotiations based on

potential contractors’ ability to meet key

systems attributes; and

 an evolutionary process that allowed for

timely delivery as capabilities matured.75

This flexible approach enabled DoD to be a

more sophisticated buyer and to gain more

capabilities within budget constraints.  

                                                     

$3.2 million foAMPVs, $8.8 million for M1s and about $1.9 million for Bradleys. Acquisition targets are currently presumed to be 2,897

AMPVs, 1,700 M1s and 2,668 Bradleys during the life of the ABCT program.   74 “Dollars & Sense,” Army AL&T, 117, April‐June 2012, 117, accessed April 17, 2017, http://asc.army.mil/web/wp‐

content/uploads/2013/04/army_al_t_magazine_Final_April‐June2012.pdf. 75Joint Program Office Joint Light Tactical Vehicle, Joint Light Tactical Vehicle (JLTV) Acquisition Strategy Report for Milestone C, Version

V5.AS, accessed April 17, 2017, https://www.dodtechipedia.mil (requires DoD Common Access Card login).

CASE STUDY: Saving Money by Updating Legislation

Fuel Storage 

By law,* DoD can award contracts for “storage

facilities for, or the storage, handling, or

distribution of, liquid fuels or natural gas” for a

maximum of 5 years, with option years of no

more than 20 years in total. The 20‐year contract

life was originally established in 1956, when

storage technology and environmental

requirements were different. Modern fuel

storage infrastructure is capable of operating for

up to 30 years without any operational

interruption.  

The 20‐year contract limit in 10 U.S.C. § 2922 no

longer reflects the reality of the fuel

infrastructure system. Extending the maximum

Section 2922 timeframe from 20 years to 30

years for both new and existing contracts would

address this problem in a more cost‐effective

manner. This approach could achieve substantial

savings in the near term. Congress should

extend the maximum length of Section 2922 fuel

storage contracts to 30 years and authorize the

30‐year maximum to be applied to existing

contracts.   

* Liquid Fuels and Natural Gas: Contracts for Storage, Handling, or

Distribution, 10 U.S.C. § 2922.

 Regulatory Recommendation: Update to DoD 4140.25‐M,

Volume II, “DoD Management of Bulk Petroleum Products, Natural

Gas, and Coal,” Chapter 8: Management of Storage and Distribution

Facilities, June 22, 1994, accessed April 27, 2017,

http://www.dtic.mil/whs/directives/corres/pdf/414025‐m‐vol2‐

chapter8.pdf.

 Defense Logistics Agency Energy, response to questions posed by

Section 809 Panel, March 16, 2017.
 21 

SIMPLIFY ACQUISITION    
Section 809 Panel Interim Report 

22 

Some of the regulations and statutes governing

defense acquisition are outdated or no longer

applicable. Others resulted from past

acquisition reforms intended to improve the

system. Successive waves of acquisition reform

have added rules and regulations that

produced the unintended consequence of

adding to the existing mass of regulations and

statutes.76 The complexity of the system of

regulations adds cost, and potentially creates a

barrier to entry for firms contemplating

engaging in business with DoD.77 Some

industry representatives have stated that

amending or repealing such regulations and

statutes could save money, improve the system,

and expand the number of companies willing to

do business with the federal government.78  

UNNECESSARILY COMPLEX SYSTEM 

Federal contracting is governed by the Federal

Acquisition Regulation (FAR) and, specific to

defense, the Defense Federal Acquisition

Regulation Supplement (DFARS). These

requirements govern such issues as

 how DoD solicits, negotiates, awards, and

administers contracts;

                                                     

76 Business Executives for National Security, Getting to Best: Reforming the Defense Acquisition Enterprise, A Business Imperative for

Change from the Task Force on Defense Acquisition Law and Oversight, July 2009, accessed April 17, 2017,

https://www.bens.org/document.doc?id=44.

77 Office of the Under Secretary of Defense, Acquisition, Technology, and Logistics, Eliminating Requirements Imposed on Industry Where

Costs Exceed Benefits, Washington, DC, 2015, accessed April 17, 2017, http://www.acq.osd.mil/fo/docs/Eliminating‐Requirements‐

Imposed‐on‐Industry‐Study‐Report‐2015.pdf. 78 Brian O’Keefe, “The Red Tape Conundrum: How the Wrong Kind of Regulation Is Strangling Business—And What To Do About It,”

Fortune, November 1, 2016, http://fortune.com/red‐tape‐business‐regulations/. 79 Federal Government Contract Overview, Find Law for Legal Professionals, accessed April 17, 2017, http://corporate.findlaw.com/law‐

library/federal‐government‐contract‐overview.html. 80 William Lucyshyn, “The New Acquisition Reform Effort: Back to the Future,” Defense News, December 6, 2016, accessed April 27, 2017,

http://www.defensenews.com/articles/the‐new‐acquisition‐reform‐effort‐back‐to‐the‐future. 81 The Section 800 Panel, formally known as the DOD Acquisition Law Advisory Panel, was established pursuant to Section 800 of the

1991 National Defense Authorization Act. 82 DOD Acquisition Law Advisory Panel, Streamlining Defense Acquisition Law, Executive, Summary: Report of the DOD Acquisition Law

Advisory Panel, accessed April 24, 2017, http://www.dtic.mil/get‐tr‐doc/pdf?AD=ADA264919.

 what costs DoD will reimburse and how

contractors must account for those costs to

be reimbursed;

 the type of accounting systems used by

contractors; and  

 how contractors must comply with such

rules as maintaining a drug‐free workplace,

and other public policy goals.79

Many have posited that the sheer number and

complexity of the statutes, regulations,

executive orders, directives, policies, and

procedures impede the acquisition process,

reducing speed and efficiency by adding time,

complexity, and cost to the process.80  

The Section 800 Panel81 sought to address such

inefficiencies, with goals of reducing

administrative costs, improving opportunity for

small businesses, promoting efficiencies and

economy in contracting, and avoiding

unnecessary burdens for agencies and

contractors for acquiring small‐dollar

requirements.82 One of the Section 800 Panel’s

recommendations increased the threshold for

Simplified Acquisition Procedures (SAP). As

the Simplified Acquisition Threshold continued

to increase, the procurements that could use

SAP increased in complexity.  
Simplify Acquisition 

 23 

According to the FAR Clause Matrix, 431

clauses may apply to SAP contract

solicitations—more than time and materials

contracts, which are generally considered more

risky to the government.83 Contracting officers

must review and determine the applicability of

344 required if applicable and 76 optional clauses

based on their understanding of the

requirements. As one contracting officer told

the Section 809 Panel, it is time to “put

‘simplified’ back in simplified procurements.”84  

                                                     

83 Federal Acquisition Regulation 52.301, “Solicitation provisions and contract clauses (Matrix),” accessed April 17, 2017,

https://www.acquisition.gov/far/html/52_301Matrix.html.   84 Army contracting officers, round table conversation with Section 809 Panel professional staff, November 14, 2016. 85 U. S. Army, “Acquisition Strategy Schedule Analysis and Lessons Learned,” provided to Section 809 Panel professional staff via email,

January 18, 2017.

Burdensome document requirements slow the

system and create hurdles for program

management offices. For example, before

getting to the final RFP for information

technology services, buyers must complete

12 mandatory documents, requiring hundreds

of pages of research and many hours of

contractor consultation.85  

 

Source: “FAR 52.301, Solicitation Provisions and Contract Clauses,” https://www.acquisition.gov/far/html/52_301Matrix.html.

Table 1. FAR Part 52.301 FAR Matrix – Solicitation Provisions and  

Contract Clauses by Principal Type and Purpose of Contract
Section 809 Panel Interim Report 

24 

MISSION MUST COME FIRST 

When a commercial company is buying goods

and services for its business, it focuses the deal

on what it is buying. When DoD buys, it must

focus not only on what, but also how it will buy

goods and services and how the seller will

operate.

A number of statutes and regulations promote

public policy goals. Some of the public policies

promoted in the FAR or defense‐specific

regulations are intended to support the mission

of DoD. Examples of such regulations include

those aimed at preserving a domestic supply of

critical defense articles and those aimed at

promoting DoD’s access to innovative

technologies developed by small businesses.

Other public policy requirements do not

directly support DoD’s mission, but focus on

how contractors operate. Taken individually,

these statutes and regulations promote laudable

public policies, while imposing marginal cost.

Taken together, however, these requirements

add substantial cost, as well as complexity,

bureaucracy, and time, to the acquisition

process—cost that DoD may no longer be able

to afford when weighed against the public

benefits.  

Public policy requirements must be assessed to

determine whether the costs, including time,

outweigh the benefits to industry, government,

and, in some cases, the regulations’ intended

beneficiaries. To support such an effort, the

FAR should be amended to emphasize that the

primary goal of the acquisition process is to

support the agency mission, and that

promoting public policy objectives is a

secondary goal of the process.  

CASE STUDY: Simplifying Acquisition

Recycled Paper 

The 1998 NDAA put in place the 30 percent

postconsumer‐waste requirement for DoD. The

FY 2017 NDAA repealed the requirement in

statute, yet Executive Order (EO) 13693* and the

related FAR parts and clause still stand. These

regulations constitute an unnecessary contract

clause requirement. Paper‐use reduction has

been achieved, with paper in landfills having

decreased by 50 percent since 2003,  through

administrative changes such as increased use of

electronic documentation, electronic

recordkeeping, and mandated use of double‐

sided copying. Executive Order 13693 should be

revised. The guidance at FAR 4.3, Paper

Documents, FAR 11.303, Special Requirements

for Printing and Writing Paper, and the clause at

FAR 52.204‐4, Printed or Copied Double‐Sided on

Postconsumer Fiber Content Paper, should be

changed, which would eliminate an unnecessary

contract clause requirement.

* Executive Order 13693, Sec.3(i)(v), March 19, 2015.

 ”Paper Recovery & Landfill,” Paper Recycles, accessed April 24,

2017, http://www.paperrecycles.org/statistics/paper‐recovery‐

landfill.

 According to the National Archives website page “Why Federal

Agencies Need to Move Towards Electronic Recordkeeping” at

https://www.archives.gov/records‐mgmt/policy/prod1afn.html,

electronic recordkeeping (ERK) “provides long‐term cost savings

(reducing the need for parallel recordkeeping systems, i.e., paper

and electronic). While there are costs associated with implementing

and maintaining electronic recordkeeping, ERK can reduce or avoid

costs for many areas associated with paper filing, including the costs

for storage space, materials (e.g., paper, folders, cabinets), and

labor.”
Simplify Acquisition 

 25 

CASE STUDY: Simplifying Acquisition

Texting While Driving 

On October 1, 2009, President Barack Obama

issued EO 13513, Federal Leadership on Reducing

Text Messaging While Driving, which includes

language to encourage contractors to employ

practices and policies to ban texting while driving

and resulted in the addition to the FAR of Subpart

23.11, Encouraging Contractor Polices to Ban

Text Messaging While Driving. FAR Clause 52.223‐

18, Encouraging Contractor Policies to Ban Text

Messaging While Driving, also includes this

language, which must be in all solicitations and

contracts and in all subcontracts exceeding the

micro‐purchase threshold. This requirement is no

longer needed due to changes in state laws and

DoD installation rules. DoD has issued directives

to prohibit the use of cell phones while driving

(with the exception of hands‐free use) on all

military installations.* Installation rules and

regulations governing cell phone use are posted

at installation entry points.  Furthermore, 46

states, D.C., Puerto Rico, Guam, and the

U.S. Virgin Islands ban text messaging for all

drivers. The FAR language should be revised to

remove the contract clause requirement.

* DoD Traffic Safety Program, DODI 6055.04 (2013), enclosure 3

paragraph 6(d)(2).

 Insurance Institute for Highway Safety Highway Loss Data

Institute, Cellphones and Texting, accessed April 18, 2017,

http://www.iihs.org/iihs/topics/laws/cellphonelaws.

 “DoD to Restrict Cell Phone Use on Military Bases,” Department

of Defense, accessed April 18, 2017,

http://archive.defense.gov/news/newsarticle.aspx?id=14689.

 Federal Acquisition Regulation 42.302(a)(39) states that a duty of

the Administrative Contracting Officer is to ensure contractor

compliance with contractual safety requirements. The texting while

driving clause is one of those requirements.

CASE STUDY: Simplifying Acquisition

$1 Coins 

The Presidential $1 Coin Act of 2005 requires that

business operations performed on federal

government premises provide for accepting and

dispensing of existing and proposed dollar coins.  

The $1 coin requirement in law, as implemented

through the FAR, does not appear to have

achieved the desired result. According to GAO,

there is a lack of widespread acceptance of the

coin by the public and adequate supply to meet

the demand for 40 years.* Congress should

amend the statutory requirement at 31 U.S.C.

§ 5112(p)(1). The FAR should be amended

accordingly, which will remove a contract clause

requirement.

* Government Accountability Office, Coin Inventory Management

Needs Better Performance Information, GAO‐14‐110, accessed

April 24, 2017, http://www.gao.gov/assets/660/658599.pdf.

   
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 27 

ENABLE THE WORKFORCE    
Section 809 Panel Interim Report 

28 

DoD needs an acquisition system that is simple,

understandable, and executable by people

operating in an environment that empowers

and incentivizes them to make good decisions.  

Defense acquisition is a human activity

dependent on the judgments, considerations,

interests, and decisions of people operating in

the real world. Regardless of how impressive

policy initiatives look on paper, or how

effective the acquisition system is in theory, the

ultimate effectiveness and efficiency of defense

acquisition depends on and is determined by

the people who are responsible for all phases of

acquisition.86

People respond to prevailing norms and the

culture in which they operate. Teams that are

highly motivated, given a clear vision, properly

empowered, and provided the right tools and

training can achieve tremendous results.87 A

workforce that is sent conflicting messages,

incentivized to make decisions that lead to

suboptimal outcomes, mired in bureaucracy,

and overburdened by complex and stifling

                                                     

86 Blue Ribbon Defense Panel, Department of Defense, Report to the President and the Secretary of Defense on the Department, 94,

accessed April 24, 2017, file:///D:/User/My%20Documents/Downloads/AD0766055.pdf. A 2014 compilation of expert views on

acquisition reform published by the Senate Committee on Homeland Security and Governmental Affairs (Permanent Subcommittee on

Investigations) identified four themes, two of which deal exclusively with the acquisition workforce. According to the report “Nearly half

of the experts feel that cultural change is required while over two‐thirds believe improving incentives for the acquisition workforce is

necessary for reform...Two‐thirds of the contributors feel that training and recruiting of the acquisition workforce must be improved.”

See U.S. Congress, Senate Committee on Homeland Security and Governmental Affairs, Permanent Subcommittee on Investigations,

Defense Acquisition Reform: Where Do We Go From Here?, A Compendium of Views by Leading Experts, 2nd sess., 113th Cong., (2014)

(staff‐prepared report), accessed April 24, 2017, file:///D:/User/My%20Documents/Downloads/REPORT%20‐

%20DEFENSE%20ACQUISITION%20REFORM‐A%20Compendium%20of%20Views%20(10‐2‐14)1.pdf. 87 Chris McGoff, “The Primes,” (Hoboken: John Wiley and Sons, 2012). 88 Len Schlesinger and Charlie Kiefer, “When Your Boss Gives You Conflicting Messages,” Harvard Business Review, November 27, 2014,

https://hbr.org/2014/11/when‐your‐boss‐gives‐you‐conflicting‐messages. 89 Robert M. Gates, A Passion for Leadership: Lessons on Change and Reform from Fifty Years of Public Service, (New York: Alfred Knopf,

2016), 16. 90 J. Ronald Fox, Defense Acquisition Reform 1960‐2009: An Elusive Goal (Washington, D.C.: Center of Military History, 2011), 197–199.

Department of Defense, Defense Acquisition Performance Assessment Report, 5, accessed April 24, 2017,

http://www.afei.org/research/Documents/DoD%20Documents/DAPA‐Report‐web_Jan2006.pdf. See Business Executives for National

Security, Getting to Best: Reforming the Defense Acquisition Enterprise: A Business Imperative for Change from the Task Force on Defense

Acquisition Law and Oversight, 3, accessed April 24, 2017, https://www.bens.org/document.doc?id=44.

regulations will succumb to the mixed

messages they receive.88

Current statutes and regulations are overly

complex and difficult to understand and

implement, promote risk‐averse behavior, and

encourage decisions that produce suboptimal

results. Former Secretary of Defense Robert

Gates goes further by stating, “Fundamental to

bureaucratic culture is risk avoidance: It is

almost always safer for the public bureaucrat—

and too often the business bureaucrat as well—

to say no than yes. In a public environment of

exposés, recrimination, faultfinding, and

investigations both by officials and by the

media, not acting is usually safer than acting—

especially if the action involves something new

or different.”89

INCENTIVIZE EFFECTIVE 

DECISION-MAKING 

Often, the incentives in the acquisition process

encourage people to make decisions that result

in suboptimal outcomes.90 Without changing

the incentives, appreciable improvement in
Enable the Workforce 

 29 

defense acquisition is unlikely to occur.91 The

thousands of decisions made every day by

people at the operational level play a critical

role in determining acquisition outcomes. These

critical decisions extend beyond the acquisition

workforce to those who are part of the greater

acquisition process, such as individuals

responsible for requirements, budgets, and

human resources.92

Processes such as developing requirements,

contracting, making investments, or obligating

money are often driven not by a sound business

case, but by arbitrary deadlines and outside

pressures. As one program manager noted, the

general rule of thumb is not to plan to sign new

contracts in the first 3 months of a fiscal year (to

guard against effects of continuing resolutions)

or the last 3 months of a fiscal year (to guard

against unexpected delays beyond the control

of the program that may result in expiration of

funds or DoD pulling back money for failing to

meet obligation benchmarks).  

Agencies that find themselves with funds at the

end of the fiscal year may then rush to spend

                                                     

91 J. Ronald Fox, Defense Acquisition Reform 1960‐2009: An Elusive Goal (Washington, D.C.: Center of Military History, 2011), 190. This

point was reiterated in Secretary Frank Kendall’s guidance on implementing the Better Buying Power initiatives, which stated “Policies

and processes are of little use without acquisition professionals who are experienced, trained, and empowered to apply them effectively.

At the end of the day, qualified people are essential to successful outcomes and professionalism, particularly in acquisition leaders, drives

results more than any policy change.” Implementation Directive for Better Buying Power 2.0 ‐ Achieving Greater Efficiency and

Productivity in Defense Spending, Memorandum from Office of the Under Secretary of Defense (2013). 92 Robert F. Hale, Center for Strategic and Budgetary Assessments, Promoting Efficiency in the Department of Defense: Keep Trying, Be

Realistic, 20, accessed April 24, 2017, http://csbaonline.org/uploads/documents/2002.01.25‐DoD‐Efficiency.pdf. 93 Based on Section 809 Panel professional staff analysis of daily DoD data from Federal Procurement Data System, https://fpds.gov. 94 Former DoD Comptroller Robert Hale wrote in September 2016 that “year‐end spending pays for lower‐quality and lower‐priority

projects.” See Robert Hale, “Why DoD’s Year‐End Spending Needs to Change,” Breaking Defense, September 23, 2016,  

http://breakingdefense.com/2016/09/why‐dods‐year‐end‐spending‐needs‐to‐change. A 2013 study found that for recent U.S.

government information technology contracting projects, there was a statistically significant correlation between funding obligated at the

very end of the fiscal year and comparatively low quality of project outcomes. See Jeffrey B. Liebman and Neale Mahoney, National

Bureau of Economic Research, Do Expiring Budgets Lead to Wasteful Spending? Evidence from Federal Procurement, accessed April 24,

2017, http://www.nber.org/papers/w19481.pdf. 95 This state of affairs has existed for decades. In 1981, Frank C. Carlucci, deputy secretary of defense at the time, testified that low cost

estimates “are fueled by optimistic contractor proposals to win competitions and program managers who want to see their programs

funded.” Almost 30 years later, John Young, then‐under secretary of defense for acquisition, technology, and logistics echoed this

sentiment, stating “The enterprise will often pressure acquisition teams and industry to provide low, optimistic estimates to help start

programs.” See: House of Representatives Armed Services Committee: Hearings, Sess. 1, 97th Cong. , 1st Sess., Volume 11, 1981. Op. Cit.

these funds. The greatest amount of spending

occurs in the last month of the fiscal year, with

an especially prominent spike in the final week.

In the last week of FY 2016, for instance, DoD

contract obligations were about 3.5 times

greater than the annual weekly average.93 This

so‐called use it or lose it mentality—which could

be associated with spending categories (colors of

money) in appropriations law, OMB

apportionment processes, or internal DoD

decision‐making—represents inefficient

allocation of limited DoD resources.94

Both written rules and performance norms

incentivize making decisions that lead to

suboptimal outcomes. Senior defense officials,

both past and current, acknowledge that

program advocates have strong incentives to

underestimate program acquisition costs.

Contractors sometimes use unrealistically low

cost estimates to win contracts; program

representatives use low estimates to argue for

approval of the system against competing

systems.95 Such optimism in cost, schedule, and

performance often leads to cost overruns,
Section 809 Panel Interim Report 

30 

schedule slips, and capability gaps or

shortfalls.96 One example is the Navy’s Littoral

Combat Ship. GAO found, “Ships were not

delivered quickly to the fleet at low cost. Rather

cost, schedule, and capability expectations

degraded over time. In contrast, a sound

business case would have balanced needed

resources—time, money, and technical

knowledge—to transform a concept into the

desired product.”97 Incentives are needed that

promote more candor in presenting programs

to Congress and senior leaders in DoD.  

AUTHORITY AND ACCOUNTABILITY 

Authority and accountability are critical

elements in building an effective workforce.

According to the Packard Report, “We must

give acquisition personnel more authority to do

their jobs. If we make it possible for people to

do the right thing the first time and allow them

to use their common sense, then we believe that

the Department can get by with far fewer

people.”98 Without authority, even the most

skilled and incentivized professionals cannot

effectively run and manage acquisition.

                                                     

p. 883, 1086 John J. Young, Jr., Reasons for Cost Changes for Selected Major Defense Acquisition Programs (MDAPs), Memorandum,

January 30, 2009. 96 See: House of Representatives Armed Services Committee: Hearings, Sess. 1, 97th Cong. John J. Young, Jr., Reasons for Cost Changes for

Selected Major Defense Acquisition Programs (MDAPs), Memorandum, January 30, 2009. The Navy estimated the cost of the CVN‐78 at

$10.5 billion—an optimistically low number that matched the budget cap set by Congress rather than reflecting the more realistic

estimate provided by the shipbuilder, which was 22 percent higher. The Navy now estimates the procurement costs at $12.9 billion. See

Paul L. Francis, Government Accountability Office, Ford Class Aircraft Carrier: Poor Outcomes Are the Predictable Consequences of the

Prevalent Acquisition Culture, accessed April 24, 2017, http://www.gao.gov/assets/680/672877.pdf. Ronald O’Rourke, Congressional

Research Service, Navy Ford (CVN‐78) Class Aircraft Carrier Program: Background and Issues for Congress, accessed April 24, 2017,

https://fas.org/sgp/crs/weapons/RS20643.pdf.

97 Paul L. Francis, Government Accountability Office, Littoral Combat Ship and Frigate: Congress Face with Critical Acquisition Decisions,

accessed April 14, 2017, http://www.gao.gov/assets/690/681333.pdf. 98 The Packard Report, for example, stated “We must give acquisition personnel more authority to do their jobs. If we make it possible for

people to do the right thing the first time and allow them to use their common sense, then we believe that the Department can get by

with far fewer people.” President’s Blue Ribbon Commission on Defense Management, 1986 Packard Commission Report on Defense

Management, accessed April 24, 2017, http://www.documentcloud.org/documents/2695411‐Packard‐Commission.html. 99 U.S. Institute for Peace, “The QDR in Perspective: Meeting America’s National Security Needs in the 21st Century: The Final Report of

the Quadrennial Defense Review Independent Panel, 85, accessed April 24, 2017,

https://www.usip.org/sites/default/files/qdr/qdrreport.pdf.

Many regulations can remove or dilute

authority and accountability. Regulations that

dictate contract type can deprive acquisition

personnel of the discretion needed to get the

best deal for the government. Additionally, the

management structure and decision‐making

process within DoD are too bureaucratic and

encumbered by numerous layers of review.

Successive reviews do not necessarily add

substantive value, but they do add time to the

process and add to the number of people who

can say no or influence a program, including

people who do not have a stake in the outcome

of the acquisition. Because nobody holds actual

authority to manage a program, there is no one

to hold accountable. The Quadrennial Defense

Review Independent Panel concluded, “The

fundamental reason for the continued

underperformance in acquisition activities is

fragmentation of authority and accountability for

performance.”99

The process for reviewing and approving an

acquisition strategy can exceed the time it takes

to create the strategy. In one instance, the time

to review, adjudicate, and approve the

acquisition strategy for an Army enterprise
Enable the Workforce 

 31 

resource planning program took more than 6

months—longer than the time it took to create

all 383 pages that comprised the acquisition

strategy and required supporting documents

(see Figure 3). In another example, the process

of getting to the full deployment decision for

the Army’s global combat support system

required a total of 33 documents, amounting to

1,076 pages for the main documents and 17,604

pages for annex documents—a final product

that was more than 14 times the length of

Tolstoy’s War and Peace, but not as well written.

Altogether, this documentation took 1,853

calendar days (more than 5 years) to

complete.100  

The acquisition process must be simple,

understandable, and executable to support a

culture that promotes good outcomes. Such a

culture includes ensuring that people are given

                                                     

100 U. S. Army (n.d.), “Army Acquisition, Logistics, and Technology Documentation Deep Dive,” Army‐produced PowerPoint presentation.

clear authority to make decisions and are held

responsible for the consequences of the

decisions they make.  

SUPPORT THE WORKFORCE 

One of the most important ingredients to

achieve acquisition reform is a transformation

in the culture of DoD and Congress. Rules and

regulations alone, however, can no more foster

the right culture than legislation can force good

management. The workforce of today

understands the message that has been sent to

it through multiple layers of bureaucratic

review, budget cuts, hiring freezes, salary

freezes, furloughs, continuing resolutions,

damning congressional hearings, and press

releases and speeches castigating government

workers as overpaid and underperforming.  

Source: U.S. Army PEO/AESIP, “Acquisition Strategy Schedule Analysis and Lessons Learned,” Army‐produced PowerPoint

presentation, August 2014.

Figure 3. Acquisition Strategy Schedule ‐ Actual
Section 809 Panel Interim Report 

32 

All these events exact a toll on the morale of the

acquisition workforce. At some point people,

motivated by their desire to serve the country

and the men and women defending it, feel

frustrated in their efforts to make a difference

and do not feel empowered with respect to

work processes.101 The workforce deserves a

better system.

Working for government should be lauded, not

denigrated. The United States and the people

who dedicate their careers to serving it deserve

better. Congress and the administration must

take a leadership role in challenging people to

aspire to public service, making government

service a career that attracts the best and

brightest the country has to offer.  

                                                     

101 Office of Personnel Management, 2016 Federal Employee Viewpoint Survey, accessed April 19, 2017, https://www.fedview.opm.gov/.
 33 

THE PATH FORWARD    
Section 809 Panel Interim Report 

34 

Although the current acquisition system has

produced success, it cannot consistently deliver

what DoD needs given the speed of change in

the new dynamic defense marketplace. As the

Section 809 Panel explores ways to forge a

modern acquisition system, it will put forth

recommendations that will address the root

causes of systemic acquisition problems, rather

than just their symptoms.  

DoD’s focus must be on mission readiness and

performance results. The current acquisition

system is designed to achieve too many

competing ancillary good policies, sacrificing

innovation102 and technological dominance yet

adding complexity, cost, and time. We are

asking BOLD questions that will guide us in the

path forward:  

 What are the characteristics that make

programs successful, and how can these best

practices be replicated?

 What is the effect of the clarity and quality of

the requirements description in the buying

process?

 Is there a right balance between performance

results and policy initiatives? What is the

cost/value of social policies, and can they be

achieved through other means?

 What complexities can be eliminated from

buying?

 Does fiscal fluidity affect buying?  

 What barriers discourage new ideas and

discourage new entrants from transacting

with DoD?  

                                                     

102 Frank Kendall, Getting Defense Acquisition Right (Fort Belvoir, VA: Defense Acquisition University Press, 2017).

 What can be done to systematically

eliminate outdated, unclear, or peripheral

requirements in DoD regulations, policies

and practices, as well as federal law?

 Is competition in the 21st century aligned

with the Competition in Contracting Act?

 How does DoD better access the commercial

market as a savvy buyer?   

 How well does the protest process serve

government and industry?  

 What is the role of small business, and what

is the most effective way to support small

businesses in the United States?

 What data are needed, what are collected,

and how are they used?  

 Which oversight/approval requirements

bring value, and which ones take away

value?

 How can DoD accelerate decision‐making to

buy quicker?

The Section 809 Panel is committed to

proposing recommendations to make the

acquisition system more responsive, innovative,

and cost effective. The time for superficial

conversation and insubstantial changes to

regulations and statutes has passed. The global

threat is rapidly changing, the relevance of the

unique defense industrial base is waning, the

processes for acquisition are no longer efficient

or effective, and implementing these processes

is left to a workforce that is mired in constricted

thinking and risk aversion.   
The Path Forward 

 35 

The Section 809 Panel has no interest in putting

patches on a broken system. Our

recommendations will be crafted to create a

new way of doing business that will be flexible

enough to respond to current and future needs.

In addition, it will incentivize innovation,

creativity, and risk‐taking, shaping a flexible

acquisition workforce that delivers the desired

outcomes. We intend to take a big bite into real

change, rather than just nibble around the

edges. To do otherwise is to put our military’s

mission and our nation’s safety and security at

risk.

   
Section 809 Panel Interim Report 

36 

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 37 

APPENDICES 
Section 809 Panel Interim Report 

38 

APPENDIX A: ENABLING LEGISLATION 

Section 809 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114-

92), as amended by section 863(d) of the National Defense Authorization Act for Fiscal Year 

2017 (Public Law 114-328), provides:

SEC. 809. ADVISORY PANEL ON STREAMLINING AND CODIFYING 

ACQUISITION REGULATIONS.

(a) ESTABLISHMENT.—The Secretary of Defense shall establish an independent advisory 

panel on streamlining acquisition regulations. The panel shall be supported by the Defense Acquisition 

University and the National Defense University, including administrative support. 

(b) MEMBERSHIP.—The panel shall be composed of at least nine individuals who are 

recognized experts in acquisition and procurement policy. In making appointments to the advisory 

panel, the Under Secretary shall ensure that the members of the panel reflect diverse experiences in 

the public and private sectors. 

(c) DUTIES.—The panel shall— 

(1) review the acquisition regulations applicable to the Department of Defense with a 

view toward streamlining and improving the efficiency and effectiveness of the defense 

acquisition process and maintaining defense technology advantage; and 

(2) make any recommendations for the amendment or repeal of such regulations that 

the panel considers necessary, as a result of such review, to— 

(A) establish and administer appropriate buyer and seller relationships 

in the procurement system; 

(B) improve the functioning of the acquisition system; 

(C) ensure the continuing financial and ethical integrity of defense 

procurement programs; 

(D) protect the best interests of the Department of Defense; and 

(E) eliminate any regulations that are unnecessary for the purposes 

described in subparagraphs (A) through (D). 

(d) ADMINISTRATIVE MATTERS.— 

(1) IN GENERAL.—The Secretary of Defense shall provide the advisory panel 

established pursuant to subsection (a) with timely access to appropriate information, data, 

resources, analysis, and logistics support so that the advisory panel may conduct a thorough and 

independent assessment as required under such subsection. 

(2) INAPPLICABILITY OF FACA.—The requirements of the Federal Advisory 

Committee Act (5 U.S.C. App.) shall not apply to the advisory panel established pursuant 

to subsection (a). 

(3) AUTHORITIES.—The panel shall have the authorities provided in section 3161 

of title 5, United States Code. 

(e) REPORT.— 

(1) PANEL REPORT.—Not later than two years after the date on which the Secretary 

of Defense establishes the advisory panel, the panel shall transmit a final report to the 

Secretary. 
Appendices 

 39 

(2) ELEMENTS.—The final report shall contain a detailed statement of the findings 

and conclusions of the panel, including— 

(A) a history of each current acquisition regulation and a 

recommendation as to whether the regulation and related law (if applicable) 

should be retained, modified, or repealed; and 

(B) such additional recommendations for legislation as the panel 

considers appropriate. 

(3) INTERIM REPORTS.—(A) Not later than 6 months and 18 months after the date of 

the enactment of this Act [Nov. 25, 2015], the Secretary of Defense shall submit a report to or 

brief the congressional defense committees on the interim findings of the panel with respect to 

the elements set forth in paragraph (2). 

(B) The panel shall provide regular updates to the Secretary of Defense for purposes 

of providing the interim reports required under this paragraph. 

(4) FINAL REPORT.—Not later than 30 days after receiving the final report of the 

advisory panel, the Secretary of Defense shall transmit the final report, together with such 

comments as the Secretary determines appropriate, to the congressional defense committees. 

(f) DEFENSE ACQUISITION WORKFORCE DEVELOPMENT FUND SUPPORT.—The 

Secretary of Defense may use amounts available in the Department of Defense Acquisition Workforce 

Development Fund established under section 1705 of title 10, United States Code, to support activities 

of the advisory panel under this section. 

    
Section 809 Panel Interim Report 

40 

APPENDIX B: PANEL ACTIVITIES 

Monthly Full-Panel Meetings 

September 20‐21, 2016

Identifying the “Big Rocks” to Improving

Defense Acquisition and Maintaining Defense

Technology Advantage

 BG David Ehrhart, USAF (Ret.), Lockheed Martin Corp.

 Susan Warshaw Ebner, ABA Public Contract Law

AIA Perspectives  Jason Timm, Aerospace Industries Association

Updating the Regulatory Source Code  Andrew Hunter, Center for Strategic and International

Studies

Acquisition Transformation Project,

Acquisition of the Future (AOF)

 Ann‐Marie Johnson, ASI Government

 Dina Jeffers, Deputy Secretary of the Army, Procurement

 Kymm McCabe, Deloitte Consulting

OFPP Priorities and Category Management  Anne Rung, OFPP, OMB

Perspectives on Acquisition Reform, Lessons

Learned from Research

 Dan Chenok, IBM Center for Business of Government

Acquisition Reform to Enable Military

Effectiveness

 Lou Kratz, Lockheed Martin Corp.

Industry Roundtable (cohosted by U.S.

Chamber of Commerce and Professional

Services Council)

 Christian Zur, U.S. Chamber of Commerce

 Scott Amey, Project on Government Oversight

 Brian Collins, Business Executives for National Security

(BENS)

 Susan Maybaumwisniewski, BENS

 Mandy Smithberger, Center for Defense Information

 Roger Waldron, Coalition for Government Procurement  

November 15‐16, 2016

Expert Presentations to the Panel  Chris Gunderson, U.S. Air Force

 Louis Kratz, Lockheed Martin Corp.

 Wendy Ginsberg, Congressional Research Service

December 14, 2016

Expert Presentations to the Panel  Soraya Correa, U.S. Department of Homeland Security

 Paul Francis, Government Accountability Office

January 24‐25, 2017

Major Defense Acquisition Programs  Lt Gen Christopher C. Bogdan, F‐35 Executive Officer

 VADM David Johnson, Principal Military Deputy

 Frank Kendall, Former USD, AT&L

 Gary Bliss, OUSD (AT&L)
Appendices 

 41 

February 21‐22, 2017

Geopolitical Threat Environment  Heather Conley, Center for Strategic and International

Studies (CSIS)

 Melissa Dalton, CSIS

 Ben FitzGerald, Center for a New American Security (CNAS)

 Lt Gen Anthony Ierardi, Joint Chiefs of Staff, J8

Acquisition of Services in DoD  Ken Brennan, Defense Procurement and Acquisition Policy

(DPAP)

 James Meade, Naval Air Systems Command (NAVAIR)

 Dan Helfrich, Deloitte Consulting LLP

March 21‐22, 2017

Commercial Buying  James Steggall, AIA

 Janice Muskopf, AFMC

 Joseph Fengler, AIA

 Jon Etherton. Etherton & Associates

 Paul Milenkowic, ACC‐NJ, Picatinny Arsenal

 Bill McNally, NASA

 Tyler Merkeley, HHS, BARDA

 Tim Applegate, DARPA

 Scott Ulrey, DARPA

April 25‐26, 2017

Expert Panel: The Effects of Socio‐Economic

Policies on Defense Acquisitions

 James Galvin, PhD, DoD Small Business Programs

 Kenneth Dodds, U.S. Small Business Administration

 Donna Huneycutt, Wittenberg Weiner Consulting

 Burt Ford, Lockheed Martin Corp.

Building a National Security Marketplace for

Rapid Technology Discovery and Acquisition

 Tim Greeff, NSTXL

Imagining a Post‐Barriers World  Meagan Metzger, DCode42

Semi-Monthly Stakeholder Meetings 

January 12, 2017

Think Holistically and Broadly About the

Panel Mandate

 Stan Soloway, Celero Strategies

State of Defense IT Acquisition Reform  John Weiler, IT Acquisition Advisory Council (IT‐AAC)  

 Marvin Langston, Langston Associates, LLC

PSC Research on DoD Task Order Awards

Made Under IDIQ Contracts

 Alan Chvotkin, Professional Services Council (PSC)  

 Matthew Taylor, Professional Services Council (PSC)

IDIQ Discussion  Jeff Koses, GSA, Office of Government‐wide Policy  

 Roger Waldron, Coalition for Government Procurement
Section 809 Panel Interim Report 

42 

January 26, 2017

Commercial Subcontract Flowdown;

Simplified Acquisition Procedures

 Ron Smith, Ronald Smith Contracts

Acquisition Reform and Successful Programs  Jeff Wieringa, Navy International Programs Office (NIPO)

February 23, 2017

Security Cooperation Reforms and the Impact

of FY17 NDAA

 VADM Joseph Rixey, Defense Security Cooperation Agency

DoD's Use of Project Structure  Mike Morgan, Project Management Institute  

 Charles Mahon, Project Management Institute  

 John Driessnack, Project Management Institute

Successful Acquisition and Fielding of

Software in the DoD: Impediments and

Improvements

 Matt Chandler, Palantir Technologies

Acquisition Workforce Study  Rene Thomas‐Rizzo, Human Capital Initiatives, OUSD

(AT&L)

March 9, 2017

Technology: How to Use and Buy More

Effectively

 Jennifer Napper, ACT‐IAC  

 Lou Kerestesy, ACT‐IAC  

 Kenneth Allen, ACT‐IAC

Doing Business with DoD: Small Business

Perspective

 Bryson Bort, Grimm

Strategies for Contracting Digital Services  David Zvenyach, GSA, 18F

March 23, 2017

Challenges Related to Government Practices

for Commercial Items and Services

Acquisitions

 Danielle Berti, Johnson & Johnson  

 Stephanie Gilson, Johnson & Johnson

The State of Public Procurement Metrics  Raj Sharma, Public Spend Forum

Organizational Culture and the Panel’s

Mission

 Lou Kerestesy, Gov Innovation

Acquisition of the Future (AOF) Model  Stan Soloway, Celero Strategies  

 Kymm McCabe, Deloitte

DoD Acquisition  Mike Morgan, Project Management Institute  

 Charles Mahon, Project Management Institute  

 John Driessnack, Project Management Institute

April 13, 2017

Software Concerns in DoD Acquisition: The

Opportunity Presented by Agile Development

 Eileen Wrubel, Software Engineering Institute, CMU  

 Alyssa Le Sage, Software Engineering Institute, CMU

Cloud and IT Acquisition Policy:

Recommendations and Next Steps

 Richard Beutel, Cyrrus Analytics

Optimizing Acquisition: Procurement

Transformation and Category Management

 David Shields, ASI Government  

 Anne Laurent, ASI Government
Appendices 

 43 

April 27, 2017

Regulations and Laws that Add Unnecessary

Bureaucratic Obstacles to DoD Acquisitions

 Barbara Kinosky, Esq., Centre Law and Consulting

The Highly Regulated Federal Purchasing

System: Implications and Alternatives

 Richard Dunn, Strategic Institute for Innovation in

Government Contracting

 David Rothzeid, DIUx

Commercial Buying  Shay Assad, Defense Procurement and Acquisition Policy

Team Meetings/Interviews 

 (ISC)^2

 Aerospace Industries Association

 AFCEA

 Air Force Materiel Command

 Allen Federal Business Partners

 Amazon Business, Public Policy, and Web Services

 ANG Budget Division Chief

 Anser

 Army Tank and Automotive Command (TACOM)

 ASN (RDA), DASN Unmanned

 Ausco, Inc.  

 BAE

 Bain Capital

 BMNT Partners

 Boeing

 Booz Allen Hamilton

 Buchanan & Edwards

 Coalition for Government Procurement

 Cpacket Networks

 Cyber Security Strategies, LLC

 Cymmetria

 DARPA, Contracts Management Office

 DAU

 DCode42

 Defense Contract Management Agency

 Defense Logistics Agency

 Deloitte

 Department of Commerce

 Department of Energy  

 DFJ Venture

 DHHS, Biomedical Advanced Research and Development Authority (BARDA)

 DIUx

 DoD Military and Industrial Base Policy
Section 809 Panel Interim Report 

44 

 DSMC

 Etherton & Associates

 ForgeRock

 GAO, Acquisitions and Sourcing Management Office

 General Dynamics

 GSE Dynamics

 Hack4Defense

 Harvard Kennedy School of Bus

 HeartFlow

 Heritage Foundation

 HQDA/DASA P

 InfoReliance

 Information Systems Security Association  

 Integrated Dual Use Commercial Companies (IDCC)

 Invensense

 ITAPS

 JLT Speciality USA

 Johnson & Johnson, Government Business Compliance

 Leidos

 Lockheed Martin

 Microsoft

 MITRE

 NASA Contracts and Grants Policy and Office of Procurement

 NDU/USCG

 NGC

 NOAA

 NRI Secure Technologies

 NSTXL

 Nyotron

 OASN(FM&C), FMB

 OFPP

 OPNAV, N9

 OSD‐Comptroller

 Phillips Screw Company

 Precision Gear

 Prevalent

 Procurement Technical Assistance Center – Maryland and Virginia

 QCWare

 Raytheon

 Sandia National Laboratories

 Section 813 Panel

 Senator Collins Staff

 Sevatec
Appendices 

 45 

 SS8

 Symantec

 Telefonica

 U.S. Army Contracting Command

 U.S. Army Corps of Engineers

 United Technologies

 University of Illinois at Urbana‐Champaign; School of Information Sciences

 USD(AT&L), DPAP

 Varonis

 WING Venture Capital

 Wittenberg‐Weiner Consulting

 Yaniv Strategies
Section 809 Panel Interim Report 

46 

APPENDIX C: PANEL TEAMS 

FAR to Statute Baseline 

Team 1 is reviewing the acquisition regulations and statutes applicable to DoD to

develop recommended changes or deletions that support timely acquisition of

systems, services, and solutions supporting DoD mission. This effort includes a focus

on recommendations to maintain the DoD’s technological advantage and enhance

access to emerging technologies.

Streamlined Procurement Process 

Team 2 is researching options for substantially streamlining noncomplex acquisitions

of less than $15 million. Although the current acquisition system generally treats

$1 million contracts the same as $1 billion contracts, the team is considering ways to

enable DoD to meet its acquisition needs for smaller contracts.

Commercial Buying 

Team 3 is focused on simplifying DoD’s commercial buying practices to enable the

department to have greater access to companies not currently selling to the

department, and to be more adaptable and agile in its acquisition process.  

Barriers to Entry 

Team 4 is focused on removing regulatory, cultural, or bureaucratic barriers to entry

to the DoD marketplace in an effort to attract companies interested in conducting

business with DoD that have not done so previously. The team seeks ways to

restructure DoD’s business models support and maintain and increase technological

dominance.  

Characteristics of Successful Programs 

Team 5 is identifying the attributes and qualities common to successful programs,

with an eye toward techniques, tools, and practices that can be widely employed. The

team will make recommendations for best practices, regulations, and statutes.  
Appendices 

 47 

IT Acquisition 

Team 6 is investigating how to best streamline the information technology (IT)

acquisition process as DoD modernizes its use of IT, with a specific focus on defense

business systems and IT services. The ultimate goal is to increase use of commercial

best practices and business processes, delivering capability faster and keeping DoD’s

technology current and supportable.

Budget 

Team 7 is considering the broader budgeting process in DoD—how you get money

and how you spend it. The team aims to arrive at recommendations that will optimize

budgeting policy and processes to maintain military technological superiority through

the efficient flow of resources in the acquisition system.  

Streamlining Regulations 

Team 8 is identifying defense acquisition regulations that are no longer necessary.

The team is packaging together comprehensive ideas that would substantially

streamline the acquisition process.  

Cost Accounting Standards 

Team 9 is reviewing the administrative and accounting requirements of cost

accounting standards (CAS), along with exemptions from CAS and thresholds for

applying CAS to contracts. The team will make recommendations aimed at eliminating

unnecessary or outdated requirements, increasing clarity, reducing administrative

costs, and providing a consistent and fair basis of accounting for CAS‐covered

contracts.
Section 809 Panel Interim Report 

48 

APPENDIX D: COMMUNICATION WITH THE PANEL 

Website 

The Section 809 Panel seeks feedback from the diverse group of stakeholders that have interest in issues

related to defense acquisition, including DoD officials, members of the DoD acquisition workforce at all

levels, service members, industry officials from both large and small businesses, and U.S. citizens.

The panel offers two avenues for offering feedback on its website at https://section809panel.org.

Stakeholders can submit general comments and questions about the Section 809 Panel by choosing the

General Comments option under the Contact Us tab. Stakeholders who would like to suggest

recommendations for the panel can do so by choosing the Recommendations option under the Contact Us

tab.  

Members of the public and media may attend open sessions at Section 809 Panel meetings. Information

about upcoming meetings is available on the panel’s website.

News Clips 

The Section 809 Panel publishes a daily news clips publication that highlights current articles related to

defense acquisition. Each business day the panel publishes the clips to its web site. Those interested in

having the daily clips emailed to them should contact Katie Cook at katie.cook@dau.mil.

Social Media 

For information related specifically to the panel, stakeholders can follow the Section 809 Panel on

Twitter (@Section809Panel) or LinkedIn (Section 809 Panel).

Public Information 

Organizations interested in hosting panel members for speaking engagements and media outlets

interested in publishing or broadcasting items about the commission should contact Shayne Martin at

shayne.martin@dau.mil.
Appendices 

 49 

APPENDIX E: PROFESSIONAL STAFF 

Executive Staff 

Moshe Schwartz

Executive Director

Col. Marvin Baugh, USAF

Chief of Staff

John Haskell, PhD

Research Director

Wendy LaRue, PhD

Communications Director

Legal Staff

Robert Cover

Legislative Drafter

Herb Fenster

Outside Counsel

Sandy Hoe

Outside Counsel

Professional Staff

Lawrence Asch Katie Cook COL Harry Culclasure, USA Shirley Franko

Darren Harvey Jeremy Hayes Dina Jeffers Michelle Johnson, PhD

Maj. Sam Kidd, USAF Jarrett Lane   CDR Michele LaPorte, USN Michael Madsen

Shayne Martin Jennifer McKinney Martha Milan Gabriel Nelson

Hannah Oh Ryan Polk Melissa Rider Joshua Schneider

Jeanette Snyder   Jennifer Taylor   Nicolas Tsiopanas   

   
Section 809 Panel Interim Report 

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